Preferences over social risk

We elicit individual preferences over social risk. We identify the extent to which these preferences are correlated with preferences over individual risk and the well-being of others. We examine these preferences in the context of laboratory experiments over small, anonymous groups, although the met...

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Bibliographic Details
Published in:Oxford economic papers 2013-01, Vol.65 (1), p.25-46
Main Authors: Harrison, Glenn W., Lau, Morten I., Rutström, E. Elisabet, Tarazona-Gómez, Marcela
Format: Article
Language:English
Subjects:
Altruism
Comparative analysis
Decision making
Dictators
Endowments
Financial risk
Games
Group membership
Lotteries
Musical intervals
Preferences
Risk aversion
Risk aversion preference
Risk preferences
Risk sharing
Social conditions & trends
Social economics
Studies
Well-being
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Summary:We elicit individual preferences over social risk. We identify the extent to which these preferences are correlated with preferences over individual risk and the well-being of others. We examine these preferences in the context of laboratory experiments over small, anonymous groups, although the methodological issues extend to larger groups that form endogenously (e.g., families, committees, communities). Preferences over social risk can be closely approximated by individual risk attitudes when subjects have no information about the risk preferences of other group members. We find no evidence that subjects systematically reveal different risk attitudes in a social setting with no prior knowledge about the risk preferences of others compared to when they solely bear the consequences of the decision. However, we also find that subjects are significantly more risk averse when they know the risk preferences of other group members.
ISSN:0030-7653
1464-3812
1464-3812
DOI:10.1093/oep/gps021