Decisions under Uncertainty in Social Contexts

Holger Rau and Stephan Müller

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: This paper theoretically and experimentally studies decision-making in risky and social environments. We explore the interdependence of individual risk attitudes and inequality aversion as two decisive behavioral determinants in such contexts. Our model and the data demonstrate that individual risk aversion is attenuated when lagging behind peers, whereas it is amplified under favorable income inequality. People's choices are also are sensitive to their degree of inequality aversion.

JEL-codes: C91 D03 D63 D81 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cbe and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168228

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