Peer Effects in Risk Taking

Amrei M. Lahno and Marta Serra-Garcia

Discussion Papers in Economics from University of Munich, Department of Economics

Abstract: This paper examines the effect of peers on individual risk taking. In the absence of informational motives, we investigate why social utility concerns may drive peer effects. We test for two main channels: utility from payoff differences and from conforming to the peer. We show experimentally that social utility generates substantial peer effects in risk taking. These are mainly explained by utility from payoff differences, in line with outcomebased social preferences. Contrary to standard assumptions, we show that estimated social preference parameters change significantly when peers make active choices, compared to when lotteries are randomly assigned to them.

Keywords: Peer Effects; Decision Making under risk; Social Comparison; Social Preferences; Laboratory Experiment (search for similar items in EconPapers)
JEL-codes: C91 C92 D03 D83 G02 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-net, nep-upt and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenec:14309

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