IDEAS home Printed from https://ideas.repec.org/a/jdm/journl/v3y2008i7p493-500.html
   My bibliography  Save this article

Observing others' behavior and risk taking in decisions from experience

Author

Listed:
  • Eldad Yechiam
  • Meir Druyan
  • Eyal Ert

Abstract

This paper examines how observing other people's behavior affects risk taking in repeated decision tasks. In Study 1, 100 participants performed experience-based decision tasks either alone or in pairs, with the two members being exposed to each others' choices and outcomes. The tasks involved either equiprobable gains and losses or frequent small gains and rare large losses. The results indicated that, in both risk types, the social exposure increased the proportion of risky selection, but its effect was stronger in the rare-loss condition. In Study 2 the rare-loss task was administered to 32 study participants, with a target individual observing the choices of a paired individual. The results showed that observing others, rather than being observed, led to the pattern of increased risk taking. The findings of the two studies indicate the importance of distinguishing different types of risky situations and shed light on contradictory findings in the literature.

Suggested Citation

  • Eldad Yechiam & Meir Druyan & Eyal Ert, 2008. "Observing others' behavior and risk taking in decisions from experience," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 3(7), pages 493-500, October.
  • Handle: RePEc:jdm:journl:v:3:y:2008:i:7:p:493-500
    as

    Download full text from publisher

    File URL: http://journal.sjdm.org/8530/jdm8530.pdf
    Download Restriction: no

    File URL: http://journal.sjdm.org/8530/jdm8530.html
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ratner, Rebecca K & Kahn, Barbara E, 2002. " The Impact of Private versus Public Consumption on Variety-Seeking Behavior," Journal of Consumer Research, Oxford University Press, vol. 29(2), pages 246-257, September.
    2. Charness, Gary & Grosskopf, Brit, 2004. "What makes cheap talk effective? Experimental evidence," Economics Letters, Elsevier, vol. 83(3), pages 383-389, June.
    3. Brit Grosskopf & Ido Erev & Eldad Yechiam, 2006. "Foregone with the Wind: Indirect Payoff Information and its Implications for Choice," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(2), pages 285-302, August.
    4. Ariely, Dan & Levav, Jonathan, 2000. " Sequential Choice in Group Settings: Taking the Road Less Traveled and Less Enjoyed," Journal of Consumer Research, Oxford University Press, vol. 27(3), pages 279-290, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tilman Betsch & Stefanie Lindow & Christoph Engel & Corinna Ulshöfer & Janet Kleber, 2011. "Has The World Changed? My Neighbor Might Know Effects of Social Context on Routine Deviation," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_21, Max Planck Institute for Research on Collective Goods.
    2. Bougheas, Spiros & Nieboer, Jeroen & Sefton, Martin, 2015. "Risk taking and information aggregation in groups," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 34-47.
    3. repec:kap:expeco:v:21:y:2018:i:2:d:10.1007_s10683-017-9541-4 is not listed on IDEAS
    4. Bougheas, Spiros & Nieboer, Jeroen & Sefton, Martin, 2013. "Risk-taking in social settings: Group and peer effects," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 273-283.
    5. Amadou Boly & Robert Gillanders & Topi Miettinen, 2016. "Deterrence, peer effect, and legitimacy in anti-corruption policy-making: An experimental analysis," WIDER Working Paper Series 137, World Institute for Development Economic Research (UNU-WIDER).
    6. Gee, Laura Katherine, 2016. "The More You Know: Information Effects on Job Application Rates in a Large Field Experiment," IZA Discussion Papers 10372, Institute for the Study of Labor (IZA).
    7. Valeria Faralla & Alessandro Innocenti & Eva Venturini, 2013. "Risk Taking and Social Exposure," Labsi Experimental Economics Laboratory University of Siena 046, University of Siena.
    8. repec:kap:jrisku:v:56:y:2018:i:2:d:10.1007_s11166-018-9275-5 is not listed on IDEAS

    More about this item

    Keywords

    risky shift; social learning; foregone payoff;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jdm:journl:v:3:y:2008:i:7:p:493-500. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jonathan Baron). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.