Cognitive Ability and Risk Preferences: A Reconsideration


I plan to revisit the previous results on the relationship between ability and risk preferences. The existing literature suggests that higher cognitive ability is associated with lower risk aversion, however, the mechanism behind this effect remains unclear. It is also unclear how robust this result is to using alternative measures of ability and risk elicitation tasks. I plan to use a measure of cognitive ability that I developed in my previous work along with a risk elicitation task that allows measuring both risk attitudes and the decision-making quality. I hypothesize that higher cognitive ability is associated with higher decision-making quality rather than with risk attitudes per se.