Abstract

We investigate gender differences in the stability of risk preferences over time and across stake sizes of lottery choices. Subjects participate in a 12-week, online
experiment with high- and low-stakes lottery choices. Our study incorporates self-reported measures of the states of mind of the participants – specifically sources and levels of stress and happiness, as well as financial well-being – to explain the weekly lottery choices of males and females. At the aggregate level, we do not observe a significant gender difference in average risk attitudes either within or across stakes. For both genders, risk tolerance for low-stakes lotteries increases over time; for high-stakes lotteries, only females become more risk tolerant. At the individual level, both genders exhibit a relatively high level of choice stability. For both males and females there is some evidence that risk tolerance increases across time for low-stake lotteries. We observe a gender difference in the response to stress and happiness. Males become more risk tolerant at both stake sizes when experiencing family-sourced stress. For females, we find greater risk aversion for high-stakes lotteries when experiencing university-sourced stress and relationship-sourced happiness and greater risk tolerance when feeling more financially stable. Males exhibit a decrease in the instability (variability) of lottery choices as time passes, suggesting learning or increasing comfort with riskier choices with experience. Finally, regardless of gender, roughly equal numbers of subjects exhibit risk tolerance that is decreasing, constant, or increasing with stakes, and the risk tolerance of our subjects across stakes are relatively stable.