Risk-taking in social settings: Group and peer effects

Spiros Bougheas, Jeroen Nieboer and Martin Sefton

Journal of Economic Behavior & Organization, 2013, vol. 92, issue C, 273-283

Abstract: We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare consultation to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmark treatments replicate findings that groups take more risk than individuals in the investment task; content analysis of group discussions reveals that higher risk-taking in groups is positively correlated with mentions of expected value. In our consultation treatments, we find evidence of peer effects: decisions within the peer group are significantly correlated. However, average risk-taking after consultation is not significantly different from isolated individual choices. We also find that risk-taking after consultation is not affected by adding a feedback stage in which subjects see the choices of their consultation peers.

Keywords: Experimental economics; Choice under risk; Advice; Social influence; Peer effects (search for similar items in EconPapers)
JEL-codes: C91 C92 D71 D80 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (46)

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Working Paper: Risk Taking in Social Settings: Group and Peer Effects (2013)
Working Paper: Risk-taking in social settings: Group and peer effects (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:92:y:2013:i:c:p:273-283

DOI: 10.1016/j.jebo.2013.06.010

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