REVOLUTION AND RISK

Chris Snijders and Werner Raub

Rationality and Society, 1998, vol. 10, issue 4, 405-425

Abstract: We analyze the effects of risk preferences on cooperative behavior in a repeated Prisoner's Dilemma. We show that, counterintuitively, risk aversion favors cooperative behavior. Hence, if people are risk averse for gains and risk seeking for losses, conditions for cooperation are less restrictive when outcomes represent gains than if outcomes represent losses. In an experimental test of this prediction, we find that risk aversion indeed favors cooperation. After controlling for the effect of risk preferences, we do not find any empirical evidence for a difference between cooperation in social dilemmas in which outcomes represent gains and dilemmas where outcomes represent losses. The relevance of this result with respect to theories of collective action, in particular Coleman's account of theories of revolution, is outlined.

Keywords: risk aversion; cooperative behavior (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ratsoc:v:10:y:1998:i:4:p:405-425

DOI: 10.1177/104346398010004002

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