Inequality and risk-taking behaviour

Ed Hopkins

Games and Economic Behavior, 2018, vol. 107, issue C, 316-328

Abstract: This paper investigates social influences on attitudes to risk and reanalyses how risk taking varies with relative position and inequality. Individuals with low initial wealth, about to participate in a tournament with richer opponents, may take fair gambles even though they are risk averse in both consumption and tournament rewards. It is shown that this risk taking decreases in the inequality of initial endowments, but in contrast it increases in the inequality of tournament rewards.

Keywords: Risk preferences; Relative concerns; Tournaments; Inequality (search for similar items in EconPapers)
JEL-codes: C72 D31 D62 D63 D81 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Inequality and Risk-Taking Behaviour (2011)
Working Paper: Inequality and Risk-Taking Behaviour (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:107:y:2018:i:c:p:316-328

DOI: 10.1016/j.geb.2017.11.007

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