KEMEL Emmanuel

This paper reports two experiments in which attitudes towards temporal risk resolution is elicited from choices between two-outcome lotteries that pay out at some future fixed date and can be resolved either now or later. We show that matching probabilities provides a simple method to measure attitudes towards temporal resolution-via the utility scaleunder Kreps and Porteus' (1978) recursive expected utility. We also analyze our data using a general recursive model that can reveal attitudes towards temporal risk resolution through the utility scale and/or the probability weighting scale. In terms of goodness of fit, as well as of prediction accuracy, our results point to a better performance of the probability weighting approach. More specifically, we show that individuals become less sensitive and more pessimistic with respect to winning probabilities when lotteries are resolved later rather than now.

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Risk is a key dimension of economic decisions, but whether risk attitudes can predict real economic behaviour is still subject to investigation. We measure general practitioners' (GPs) risk attitudes and check for a relationship with variations in prescribing practices. Individual-level risk attitudes are elicited from simple survey choices on a representative national panel of 939 French GPs, and are linked to their volume of lab-test prescriptions through administrative records. Specifically, we estimate individual components of a flexible decision model under risk (rank-dependent utility) using random-coefficient estimations, and then treat these components as predictors of observed lab-test prescribing. We find that (1) GPs exhibit the usual patterns of risk attitudes: risk aversion and inverse S-shaped probability weighting prevails (2) risk aversion captured by the utility function is positively correlated with lab-test prescribing.

This document presents a summary of my research since my PhD Defense in March 2014. My work mainly consists in empirical investigations of preferences in decisions involving uncertainty and/or time. Most empirical studies on preferences under uncertainty focus on a restricted context where probabilities are known and outcomes are immediately-received monetary outcomes. My research extends the scope of decision contexts by exploring the impact of the type of consequence (the attribute), the source of uncertainty, and the timing of resolution of uncertainty and/or reception of outcomes on attitudes towards uncertainty. The document summarizes my main papers contributing to this research direction. It then presents a critical discussion of this work and proposes directions for future research.

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This paper presents an experiment that investigates differences of risk attitudes in decisions with immediate versus delayed consequences. Our experimental design allows to control for the effects of discounting and timing of risk resolution. We show that individuals are more risk tolerant in situations involving delayed consequences. Investigations based on rank-dependent utility show that this finding is mainly driven by probability weighting. More precisely, probability weighting is more elevated for delayed consequences, suggesting an overall increase in decision maker's optimism regarding the chances of success associated to risks for which consequences materialize in the future.

The consequences of most economic decisions are uncertain: they are conditional on events with unknown probabilities that decision makers evaluate based on their beliefs. Beyond consequences and beliefs, decision makers' preferences for the source of uncertainty generating events can affect decisions, entailing a source-dependence of preferences. However, there is, to date, no direct way to measure and interpret source dependence for natural sources, preventing researchers from comparing source preference across decision makers or across natural sources. This paper presents a simple and general method to measure source dependence by introducing a source-dependence function that maps the subjective probabilities of events generated by two sources. The method allows to characterize source dependence from a limited number of observations and is compatible with commonly used, choice-based data. We implement the method on four datasets and show that it consistently captures clear, albeit heterogeneous, patterns of source dependence between natural sources.

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Attitudes toward uncertainty with consequences in monetary and time units: supporting experimental studies.