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How do risk attitudes affect pro-social behavior? Theory and experiment

Sean Fahle () and Santiago I. Sautua ()
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Sean Fahle: State University of New York at Buffalo
Santiago I. Sautua: Universidad del Rosario

Theory and Decision, 2021, vol. 91, issue 1, No 4, 122 pages

Abstract: Abstract We explore how risk preferences affect pro-social behavior under uncertainty. We analyze a modified dictator game in which the dictator can, by reducing her own sure payoff, increase the odds that an unknown recipient wins a lottery. We first augment a standard social preferences model with reference-dependent risk attitudes and then test the model’s predictions for the dictator’s giving behavior using a laboratory experiment. Consistent with the predictions of the model, we find that the relationship between giving behavior and a giver’s loss aversion is mediated by the strength of the giver’s pro-social preferences. Among more (less) pro-social dictators, an increase in loss aversion increases (decreases) the likelihood that a dictator contributes to a recipient.

Keywords: Other-regarding preferences; Pro-social behavior; Reference-dependent preferences; Risk (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11238-020-09788-8

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