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Risk Taking in Social Settings: Group and Peer Effects

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  • Spiros Bougheas

    ()
    (School of Economics, University of Nottingham)

  • Jeroen Nieboer

    ()
    (School of Economics, University of Nottingham)

  • Martin Sefton

    ()
    (School of Economics, University of Nottingham)

Abstract

We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare these choices to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmarking treatments replicate earlier findings that groups take more risk than individuals in the investment task . In our consultation treatments we find evidence of peer effects: there is significant correlation of decisions within the peer group. However, average risk taking is not significantly different from the benchmark treatment with isolated individual choices. This latter result underlines the importance of payoff-commonality for bringing about higher risk-taking in groups.

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Bibliographic Info

Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2013-01.

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Date of creation: Jan 2013
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Handle: RePEc:not:notcdx:2013-01

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Keywords: experimental economics; choice under risk; advice; social influence; peer effects;

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Citations

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Cited by:
  1. Jeroen Nieboer, 2013. "Risk taking in diverse groups: Gender matters," Discussion Papers 2013-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. Alexia Delfino & Luigi Marengo & Matteo Ploner, 2013. "I Did it Your Way. An Experimental Investigation of Peer Effects in Investment Choices," CEEL Working Papers 1305, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  3. Spiros Bougheas & Jeroen Nieboerr & Martin Sefton, . "Risk Taking and Information Aggregation in Groups," Discussion Papers 2014-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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