Arbeitspapier

Sharing or gambling? On risk attitudes in social contexts

This paper investigates experimentally whether risk attitudes are stable across social contexts. In particular, it focuses on situations where some resource (for instance, a position, decision power, a bonus) has to be allocated between two parties: the decision maker can either opt for sharing the resource or for using a random device that allocates the entire prize to one of the two parties. By varying the relative situation of the decision maker with respect to the other party, we show that risk attitude is strongly affected by social contexts: participants in the experiment seem to be relatively risk seeking when they possess a relatively weaker position than the other party and risk averse when the opposite is true. Our main average results seem to be driven by the behavior of around a quarter of subjects whose choices appear to be fully determined by social comparisons. Various interpretations of the behavior are provided linking our results to preferences under risk with a social reference point and on status-seeking preferences.

Language
Englisch

Bibliographic citation
Series: Munich Discussion Paper ; No. 2013-16

Classification
Wirtschaft
Relation of Economics to Social Values
Miscellaneous Mathematical Tools
Noncooperative Games
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Subject
risk attitudes
risk preferences in social context
social reference point
status-seeking preferences
social preferences under risk

Event
Geistige Schöpfung
(who)
Kocher, Martin G.
Krawczyk, Michal
Le Lec, Fabrice
Event
Veröffentlichung
(who)
Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
(where)
München
(when)
2013

DOI
doi:10.5282/ubm/epub.17383
Handle
URN
urn:nbn:de:bvb:19-epub-17383-7
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Kocher, Martin G.
  • Krawczyk, Michal
  • Le Lec, Fabrice
  • Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät

Time of origin

  • 2013

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