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Social comparison and gender differences in risk taking

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  • Schmidt, Ulrich
  • Friedl, Andreas
  • Lima de Miranda, Katharina

Abstract

The present paper contributes to the controversy regarding gender differences in risk taking by investigating the impact of social comparison. Social comparison is formalized by integrating a social reference point into the model of Köszegi and Rabin. Drawing on previous results from evolutionary biology, we hypothesize that men (women) focus more on relative (absolute) income, i.e., the relative weight of social gain-loss utility is higher for men than for women. Our model predicts that risk taking is higher for correlated than for uncorrelated risks and that this effect is stronger for men than for women. These predictions are confirmed by a simple classroom experiment. We conclude that social comparison and the correlation of risks play an important role in the discussion of gender differences in risk taking.

Suggested Citation

  • Schmidt, Ulrich & Friedl, Andreas & Lima de Miranda, Katharina, 2015. "Social comparison and gender differences in risk taking," Kiel Working Papers 2011, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:2011
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    References listed on IDEAS

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    Cited by:

    1. Eber, Nicolas & François, Abel & Weill, Laurent, 2021. "Gender, age, and attitude toward competition," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 668-690.
    2. Schmidt, Ulrich & Neyse, Levent & Aleknonyte, Milda, 2019. "Income inequality and risk taking: the impact of social comparison information," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 87(3), pages 283-297.
    3. Filippin, Antonio & Gioia, Francesca, 2018. "Competition and subsequent risk-taking behaviour: Heterogeneity across gender and outcomes," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 84-94.
    4. Friederike Mengel & Ronald Peeters, 2022. "Do markets encourage risk-seeking behaviour?," The European Journal of Finance, Taylor & Francis Journals, vol. 28(13-15), pages 1474-1480, October.
    5. Andreas Friedl & Patrick Ring & Ulrich Schmidt, 2017. "Gender differences in ambiguity aversion under different outcome correlation structures," Theory and Decision, Springer, vol. 82(2), pages 211-219, February.
    6. Fu, Jingcheng & Sefton, Martin & Upward, Richard, 2019. "Social comparisons in job search," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 338-361.

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    More about this item

    Keywords

    risk taking; gender differences; correlation of risks; social reference point;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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