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Responsibility effects in decision making under risk

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  • Pahlke, Julius
  • Strasser, Sebastian
  • Vieider, Ferdinand M.
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    Abstract

    We explore situations in which a decision-maker bears responsibility for somebody else's outcomes as well as for her own. For gains we confirm the intuition that being responsible for somebody else's payoffs increases risk aversion, while in the loss domain we find increased risk seeking. In a second experiment we replicate the finding of increased risk aversion for large probabilities of a gain, while for small probability gains we find an increase of risk seeking under conditions of responsibility. This discredits hypotheses of a cautious shift under responsibility, and indicates an accentuation of the fourfold pattern of risk attitudes usually found for individual choices. --

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    Bibliographic Info

    Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, WZB Junior Research Group Risk and Development with number SP II 2012-402.

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    Date of creation: 2012
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    Handle: RePEc:zbw:wzbrad:spii2012402

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    Related research

    Keywords: risk attitude; prospect theory; social norms; responsibility; other-regarding preferences;

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    References

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    1. Lefèbvre, Mathieu & Vieider, Ferdinand M. & Villeval, Marie Claire, 2009. "Incentive Effects on Risk Attitude in Small Probability Prospects," IZA Discussion Papers 4545, Institute for the Study of Labor (IZA).
    2. Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
    3. Ian Bateman & Alistair Munro, 2005. "An Experiment on Risky Choice Amongst Households," Economic Journal, Royal Economic Society, vol. 115(502), pages C176-C189, 03.
    4. Mohammed Abdellaoui & Olivier L’Haridon & Horst Zank, 2010. "Separating curvature and elevation: A parametric probability weighting function," Journal of Risk and Uncertainty, Springer, vol. 41(1), pages 39-65, August.
    5. Donkers, Bas & Melenberg, Bertrand & Van Soest, Arthur, 2001. " Estimating Risk Attitudes Using Lotteries: A Large Sample Approach," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 165-95, March.
    6. Hela Maafi, 2011. "Preference Reversals Under Ambiguity," Management Science, INFORMS, vol. 57(11), pages 2054-2066, November.
    7. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
    8. Chakravarty Sujoy & Harrison Glenn W & Haruvy Ernan E & Rutstrom Elisabet E, . "Are You Risk Averse Over Other People’s Money?," IIMA Working Papers WP2005-08-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    9. Manel Baucells & Martin Weber & Frank Welfens, 2011. "Reference-Point Formation and Updating," Management Science, INFORMS, vol. 57(3), pages 506-519, March.
    10. Mohammed Abdellaoui & Aurelien Baillon & Laetitia Placido & Peter P. Wakker, 2011. "The Rich Domain of Uncertainty: Source Functions and Their Experimental Implementation," American Economic Review, American Economic Association, vol. 101(2), pages 695-723, April.
    11. Ingrid Rohde & Kirsten Rohde, 2011. "Risk attitudes in a social context," Journal of Risk and Uncertainty, Springer, vol. 43(3), pages 205-225, December.
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    Cited by:
    1. Natalia Montinari & Michela Rancan, 2013. "Social preferences under risk : the role of social distance," RSCAS Working Papers 2013/90, European University Institute.

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