Social Preferences under Risk - An Experimental Analysis
AbstractThe literature on social preferences provides overwhelming evidence of departures from pure self-interest of individuals. Experiments show that people care about others' well-being and their relative standing. This paper investigates whether this type of behavior persists when risk comes into play. I devise an experiment which sheds light on the interrelation of risk and social preferences by measuring (1) individual risk preferences, (2) interpersonal risk preferences, and (3) social preferences under certainty. The results reveal that a large share of subjects choose to accept more risk or less potential gain than individually preferred in order to increase another subjectâ€™s payoff. Further, the willingness to do so appears to be influenced by the "need" of the other person and her potential relative standing. Surprisingly, the results do not suggest that a subjectâ€™s social behavior under risk is related to his exhibited social concerns exhibited under certainty.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-022.
Date of creation: 23 Mar 2009
Date of revision:
social preferences; risk; other-regarding behavior; inequality aversion;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-28 (All new papers)
- NEP-CBE-2009-03-28 (Cognitive & Behavioural Economics)
- NEP-CDM-2009-03-28 (Collective Decision-Making)
- NEP-EXP-2009-03-28 (Experimental Economics)
- NEP-HPE-2009-03-28 (History & Philosophy of Economics)
- NEP-UPT-2009-03-28 (Utility Models & Prospect Theory)
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- Weitzel, Utz & Urbig, Diemo & Desai, Sameeksha & Sanders, Mark & Acs, Zoltan, 2010. "The good, the bad, and the talented: Entrepreneurial talent and selfish behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 64-81, October.
- Winschel, Evguenia & Zahn, Philipp, 2012. "Effciency Concern under Asymmetric Information," Working Papers 13-07, University of Mannheim, Department of Economics.
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