E. Elisabet Rutström

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We design experiments to jointly elicit risk and time preferences for the adult Danish population. We find that joint elicitation results in estimates of discount rates that are dramatically lower than those found in previous studies. Estimation of latent time preferences requires that one specify a theoretical structure to understand risk and time choices,(More)
We evaluate the claim that individuals exhibit a magnitude effect in their discounting behavior, which is said to occur when higher discount rates are inferred from choices made with lower principals, all else being equal. Much of the literature supporting this claim uses hypothetical tasks, and procedures that should not be convincing to economists. If the(More)
If belief elicitation during repeated game play changes game play, using stated beliefs to evaluate and compare theories of strategic action is problematic. We experimentally verify that belief elicitation can alter paths of play in a repeated asymmetric matching pennies game. Belief elicitation improves the goodness of fit of structural models of belief(More)
We re-evaluate the theory, experimental design and econometrics behind claims that individuals exhibit non-constant discounting behavior. Theory points to the importance of controlling for the non-linearity of the utility function of individuals, since the discount rate is defined over time-dated utility flows and not flows of money. It also points to a(More)
Subjective probabilities play a role in many economic decisions. There is a large theoretical literature on the elicitation of subjective probabilities, and an equally large empirical literature. However, there is a gulf between the two. The theoretical literature proposes a range of procedures that can be used to recover subjective probabilities, but(More)
Decisions with uncertain outcomes are often made by one party in settings where another party bears the consequences. Whenever an individual is delegated to make decisions that affect others, such as in the typical corporate structure, does the individual make decisions that reflect the risk preferences of the party bearing the consequences? We examine this(More)
Subjective probabilities play a role in many economic decisions. There is a large theoretical literature on the elicitation of subjective probabilities, and an equally large empirical literature. However, there is a gulf between the two. The theoretical literature proposes a range of procedures that can be used to recover subjective probabilities, but(More)
We develop the concept of virtual experiments and consider their application to environmental policy. A virtual experiment combines insights from virtual reality in computer science, naturalistic decision-making from psychology, and field experiments from economics. The environmental policy applications of interest to us include traditional valuation tasks(More)
We elicit individual preferences over social risk. We identify the extent to which these preferences are correlated with individual preferences over individual risk and individual preferences over the well-being of others. We examine these preferences in the context of laboratory experiments over small, anonymous groups, although the methodological issues(More)