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Risk-taking in social settings: Group and peer effects

Listed author(s):
  • Bougheas, Spiros
  • Nieboer, Jeroen
  • Sefton, Martin

We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare consultation to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmark treatments replicate findings that groups take more risk than individuals in the investment task; content analysis of group discussions reveals that higher risk-taking in groups is positively correlated with mentions of expected value. In our consultation treatments, we find evidence of peer effects: decisions within the peer group are significantly correlated. However, average risk-taking after consultation is not significantly different from isolated individual choices. We also find that risk-taking after consultation is not affected by adding a feedback stage in which subjects see the choices of their consultation peers.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167268113001625
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 92 (2013)
Issue (Month): C ()
Pages: 273-283

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Handle: RePEc:eee:jeborg:v:92:y:2013:i:c:p:273-283
DOI: 10.1016/j.jebo.2013.06.010
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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