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Deciding for Others Reduces Loss Aversion

Ola Andersson, Hakan Holm (), Jean-Robert Tyran () and Erik Wengström ()

No 976, Working Paper Series from Research Institute of Industrial Economics

Abstract: We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded. In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation, we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices.

Keywords: Risk taking; Loss aversion; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D03 D81 G02 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-lam, nep-ltv, nep-neu and nep-upt
Date: 2013-09-17
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Related works:
Journal Article: Deciding for Others Reduces Loss Aversion (2016) Downloads
Working Paper: Deciding for others reduces loss aversion (2014) Downloads
Working Paper: Deciding for Others Reduces Loss Aversion (2013) Downloads
Working Paper: Deciding for Others Reduces Loss Aversion (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0976

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