Risks on Others

Takaaki Hamada and Tomohiro Hara
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Takaaki Hamada: Faculty of Economics, Toyo University and Junior Research Fellow, Research Institute for Economics and Business Administration, Kobe University, JAPAN
Tomohiro Hara: Department of Economics, University of Maryland at College Park, U.S.A.

No DP2020-23, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: We investigate other regarding preferences when others are involved in some risks. We call such risks "risks on others (ROO)." We design a novel experiment to capture ROO, and also theoretically define risk attitudes toward others under two dimensions: an absolute term, which characterizes one's risk attitudes toward others without comparing with other individuals, and a relative term, which compares these risk attitudes between individuals. From our experiment, we find that decision makers exhibit robust risk-averse behaviors, which contradicts the most representative linear inequality aversion models by Fehr and Schmidt (1999). Utilizing our experimental setting, which enables us to compare risk attitudes toward others between subjects, we also investigate the effect of sources of ROO on other regarding behaviors.

Keywords: Other-regarding preferences; Risk preferences; Inequality aversion (search for similar items in EconPapers)
JEL-codes: C91 D63 D64 D81 D91 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2020-08, Revised 2022-09
New Economics Papers: this item is included in nep-exp, nep-neu and nep-rmg
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2020-23.pdf Revised version, 2021 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:dp2020-23

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