Risk taking for oneself and others: A structural model approach

Arbeitspapier

We examine situations in which a decision maker decides for another person as well as herself under conditions of payoff equality, and compare such decisions under responsibility to individual decisions. Estimating a structural model we find that responsibility leaves utility curvature unaffected, but accentuates the subjective distortion of very small and very large probabilities for both gains and losses. This results in an accentuation of prospect theory's four-fold pattern of risk preferences under responsibility. In addition, we also find that responsibility reduces loss aversion according to some common definitions of the latter. These results serve to reconcile some of the still largely contradictory findings in the literature on decisions for oneself and others under payoff equality.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2015-401

Classification and Topics

• Classification: Wirtschaft ; Field Experiments ; Information, Knowledge, and Uncertainty: General ; Microeconomic Analyses of Economic Development
• Subject: risk preferences ; responsibility ; social preferences

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vieider, Ferdinand M. ; Villegas-Palacio, Clara ; Martinsson, Peter ; Mejía, Milagros
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/106817
• Last update: 10.03.2025, 11:43 AM CET