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Risk Tolerance, Self-Interest, and Social Preferences

Author

Listed:
  • Lucy F. Ackert
  • Ann B. Gillette
  • Jorge Martinez-Vazquez
  • Mark Rider

Abstract

We use an experimental method to investigate whether systematic relationships exist across distinct aspects of individual preferences: risk aversion in monetary outcomes, altruism in a twoperson context, and social preferences in a larger group context. Individual preferences across these three contexts are measured, and there is no possibility for risk sharing, wealth effects, or updating expectations of the population choices. We find that social preferences are related to demographic variables, including years of education, gender, and age. Perhaps most importantly, self allocation in a two-person dictator game is related to social preferences in a group context. Participants who are more generous in a dictator game are more likely to vote against their selfinterest in a group decision-making task which we interpret to be expressions of social preferences.

Suggested Citation

  • Lucy F. Ackert & Ann B. Gillette & Jorge Martinez-Vazquez & Mark Rider, 2009. "Risk Tolerance, Self-Interest, and Social Preferences," Experimental Economics Center Working Paper Series 2009-04, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised Feb 2011.
  • Handle: RePEc:exc:wpaper:2009-04
    as

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    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2009-04.pdf
    File Function: First version, 2009
    Download Restriction: no

    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2011-03.pdf
    File Function: Revised version, 2011
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    References listed on IDEAS

    as
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    Cited by:

    1. Barmettler, Franziska & Fehr, Ernst & Zehnder, Christian, 2012. "Big experimenter is watching you! Anonymity and prosocial behavior in the laboratory," Games and Economic Behavior, Elsevier, vol. 75(1), pages 17-34.
    2. Falk, Armin & Meier, Stephan & Zehnder, Christian, 2010. "Did We Overestimate the Role of Social Preferences? The Case of Self-Selected Student Samples," CEPR Discussion Papers 8019, C.E.P.R. Discussion Papers.

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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