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How would You Decide on behalf of Your Friend?

Anita Kolnhofer-Derecskei ()

from Óbuda University, Keleti Faculty of Business and Management

Abstract: Several prominent economists have underlined that actors are often concerned about the well-being (or feelings) of others. It seems ‘homo oeconimicus’ is selfish/rational and acts like a Good Samaritan at the same time. But being a Good Samaritan and deciding about somebody else’s property is not a big deal. The aim of this study is to observe endowment heterogeneity in the case of a risky financial decision. Ownership and endowment effects were measured through using within-subjects design, i.e. two gambling situations were offered to subjects. Firstly, they should assess risks and allocate their own property. Secondly, they had to decide on behalf of one of their friends. This paper does not provide a theoretical summing up, but focuses on empirical findings. Using game experiment it was found that ownership plays a role in explaining the outcome of a risky financial situation.

Keywords: Endowment effect; Principal-Agent theory; altruism; Risk (search for similar items in EconPapers)
Date: 2017
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