Deciding for others reduces loss aversion

Arbeitspapier

We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded. In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation, we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 976

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Criteria for Decision-Making under Risk and Uncertainty
• Subject: Risk taking ; loss aversion ; experiment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Andersson, Ola ; Holm, Håkan J. ; Tyran, Jean-Robert ; Wengström, Erik
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/95623
• Last update: 10.03.2025, 11:44 AM CET