Asymmetric noise and systematic biases: A new look at the Trade-Off method

This paper investigates the role of error propagation in one of the most popular risk preferences elicitation procedures: the trade-off method. This paper shows that the reasonable hypothesis of an asymmetric distribution of the answers can generate a systematic bias in the estimation of the utility function. •We reexamine the role of error propagation in the trade-off method.•The asymmetry in the answers’ distribution might affect the shape of the utility.•The study of 1000 simulated agents demonstrates this possibility.•The sense of this bias depends on the evolution of the noise during the experiment.