Social Risk Effects: The 'Experience of Social Risk' Factor

Florian Diekert, Timo Goeschl and Christian König-Kersting

No 704, Working Papers from University of Heidelberg, Department of Economics

Abstract: Anticipating "social risk", or risk caused by humans, affects decision-making differently from anticipating natural risk. Drawing upon a large sample of the US population (n=3,982), we show that the phenomenon generalizes to risk experience. Experiencing adverse outcomes caused by another human reduces future risk-taking, but experiencing the same outcome caused by nature does not. While puzzling from a consequentialist perspective, the Experience of Social Risk Factor that we identify deepens our understanding of decision-making in settings in which outcomes are co-determined by different sources of uncertainty. Our findings imply that a unifying theory of social risk effects requires new explanations.

Keywords: social risk; risk experience; decision-making under risk; behavioral economics; experiment (search for similar items in EconPapers)
Date: 2021-08-02
New Economics Papers: this item is included in nep-exp and nep-rmg
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