Patrick DeJarnette, National Taiwan University
Abstract: This paper examines how risk preferences differ over goods and in-kind monetary rewards. I study incentivized experiments in which subjects allocate bundles of either Amazon.com goods or Amazon.com gift credit (which must be spent immediately) across uncertain states. Under a standard model of perfect information of prices and goods available, I demonstrate risk preferences across these treatments would be identical. In practice, I uncover substantial differences in risk preferences across goods and in-kind monetary rewards. I examine whether these differences are driven by price or product uncertainty as in a search model, but find no evidence that this explains the differences. I further show that this is not being driven by fungibility, functional form, or good discreteness.