10.17889/E109116
Imas, Alex
Replication data for: The Realization Effect: Risk-Taking after Realized versus Paper Losses
ICPSR Inter-university Consortium for Political and Social Research
2015
10.1257/aer.20140386
10.1257/aer.20140386
V0
Understanding how prior outcomes affect risk attitudes is critical for the study of choice under uncertainty. A large literature documents the significant influence of prior losses on risk attitudes. The findings appear contradictory: some studies find greater risk-taking after a loss, whereas others show the opposite—that people take on less risk. I reconcile these seemingly inconsistent findings by distinguishing between realized versus paper losses. Using new and existing data, I replicate prior findings and demonstrate that following a realized loss, individuals avoid risk; if the same loss is not realized, a paper loss, individuals take on greater risk.