Harbaugh, WilliamKrause, KateVesterlund, Lise2005-03-252005-03-252001-11-05Experimental Economics 5(1): 53-84.https://hdl.handle.net/1794/69445 p.In this paper we examine how risk attitudes change with age. We present participants from age 5 to 64 with choices between simple gambles and the expected value of the gambles. The gambles are over both gains and losses, and vary in the probability of the non-zero payoff. Surprisingly, we find that many participants are risk seeking when faced with high-probability prospects over gains and risk averse when faced with small-probability prospects. Over losses we find the exact opposite. Children’s choices are consistent with the underweighting of low-probability events and the overweighting of high-probability ones. This tendency diminishes with age, and on average adults appear to use the objective probability when evaluating risky prospects.307657 bytesapplication/pdfen-USProbability weightingSubjective expected utilityProspect theoryChildrenRiskArticle