Social interaction effects: The impact of distributional preferences on risky choices

Anita Gantner () and Rudolf Kerschbamer
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Anita Gantner: University of Innsbruck

Journal of Risk and Uncertainty, 2018, vol. 56, issue 2, No 2, 164 pages

Abstract: Abstract This paper identifies convex distributional preferences as a possible cause for the empirical observation that agents belonging to the same group tend to behave similarly in risky environments. We first show theoretically that convex distributional preferences imply social interaction effects in risky choices in the sense that observing a peer choose a risky (safe) option increases the agent’s incentive to choose the risky (safe) option as well, even when lotteries are stochastically independent and the agent can only observe the lottery chosen by the peer but not the corresponding outcome. We then confirm our theoretical predictions experimentally.

Keywords: Peer effects; Social interaction effects; Social preferences; Risky choices; C91; D03; D63; D64; D81 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s11166-018-9275-5

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