 42. Some Contributions of Economics to the Study of Personality 861
Rutström, 2008, for an overview). Initially, 
when the fixed payment is low, most individ -
uals choose the lottery. They switch to the 
fixed payment once it becomes sufficiently 
attractive to them. The later in the sequence 
of choices when they switch, the more they 
are willing to tolerate risk. These tasks can 
be augmented to test for various behavioral 
biases such as loss aversion (by making one 
of the options in the lottery a negative pay -
ment; see Fehr & Goette, 2007) or certainty 
premium (by replacing the fixed payment 
in each choice task with a second lottery; 
see Callen, Isaqzadeh, Long, & Sprenger, 
2014). Analogously, time preference can be 
elicited from a series of choices between a 
fixed payment today and an increasing series 
of payments in the future (Andersen, Har -
rison, Lau, & Rutström, 2008), altruism is 
measured as the amount that an individual 
would gratuitously transfer to another per -
son out of an endowment given to him by an 
experimenter (Forsythe, Horowitz, Savin, 
& Sefton, 1994), and so forth. Each experi -
mental task is designed to engage a specific 
preference, while minimizing the role of 
confounding preferences or skills on perfor -
mance.
Inferring preferences from choices that in -
volve precise monetary tradeoffs avoids the 
reference bias we discussed in the previous 
sections. As individuals are paid according 
to their choices, their decisions reveal their 
true preferences42 and can be converted to 
specific preference parameters under certain 
assumptions about the utility function.43 
These parameters can then be compared 
across schools, districts, and cultures.
When incentivized elicitation is impracti -
cal due to logistical difficulties or budget -
ary constraints, researchers sometimes use 
hypothetical questions that do not offer 
actual payoffs. However, this approach can 
result in “hypothetical bias.”44 Some ques -
tionnaires only compare hypotheticals, as 
in contingent evaluation surveys that ask re -
spondents to place a value on hypothetical 
choices. Others have respondents compare 
choices between hypothetical and incentiv -
ized measures, that is, between stated and 
revealed preference (see Harrison, 2006).
One possible approach to avoid hypotheti -
cal bias is instrument calibration. It involves 
experimentally identifying a hypothetical question or task that yields preferences that 
most closely approximate those elicited in 
an incentivized setting. Falk et al. (2018) 
implemented this approach to elicit and 
compare economic preferences around the 
world. Another approach, statistical cali -
bration, relies on identifying differences be -
tween preferences elicited in an incentivized 
and non-  incentivized setting and correcting 
for them.45 It is best employed when these 
differences vary in a systematic way with 
observed characteristics. Special care needs 
to be taken when eliciting preferences from 
young children. Simple, clearly explained 
games and choice tasks work best in this set -
ting.46
Are Economists’ Preferences  
Psychologists’ Personality  Skills?
Economists and psychologists consider pref -
erences and personality skills respectively to 
be person-  specific determinants of behavior 
that are stable across situations. The natu -
ral question is whether they represent two 
different approaches to studying the same 
underlying concepts or whether they capture 
fundamentally separate aspects of human 
differences. In the latter case, combining 
them would yield a more complete model 
for explaining human behavior. Despite an 
intuitive link between certain preferences 
and personality skills—  risk aversion and 
extraversion, time preference and consci -
entiousness, altruism and agreeableness—  
early attempts to empirically document the 
hypothesized relationships yielded mixed 
results (for a summary of the literature to 
date, see, e.g., Daly, Harmon, & Delaney, 
2009; Dohmen, Falk, Huffman, & Sunde, 
2010; Rustichini, De  Young, Anderson, & 
Burks, 2016; Almlund et al., 2011). Indeed, 
A. Becker et al. (2012) concluded that while 
both preferences and personality skills pre -
dict behavior such as labor market success, 
health, and life satisfaction, they are only 
weakly related and thus likely capture sepa -
rate underlying constructs.
Recent work by Andersson, Holm, Tyran, 
and Wengström (2018) and Jagelka (2018) 
advances this literature. They show that fail -
ure to find a tight mapping between prefer -
ences and personality may be an artifact of 
the inherent difficulty in relating two unob -