Multiple switching behaviour in different display formats of multiple price lists

ABSTRACT

A common approach to elicit risk attitude is the multiple price list with a series of binary choices. However, a frequently observed problem when using multiple price lists is that participants switch more than once from the safer to the riskier option, thus exhibiting multiple switching behaviour. The present study analyses whether the visualization of different multiple price lists reduce multiple switching behaviour. Therefore, we conduct two types of multiple price lists in two different display formats. Participants are randomly assigned into a textual or a visual group and carry out both multiple price lists in the corresponding display format. Our results reveal that different types of multiple price lists lead to differences in the extent of multiple switching behaviour. Moreover, we show that the visualization of a multiple price list can be an instrument to greatly reduce multiple switching behaviour.

KEYWORDS:

• Experiment
• multiple price list
• multiple switching behaviour
• visualization

JEL CLASSIFICATION:

• C90
• D81
• D89

Acknowledgement

The authors would like to thank anonymous referees and the editor for helpful comments and suggestions and also gratefully acknowledge financial support from German Research Foundation (DFG).

Disclosure statement

No potential conflict of interest was reported by the authors.