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Social Comparison and Risk Taking Behavior

Astrid Gamba (), Elena Manzoni () and Luca Stanca ()

No 2014-031, Jena Economic Research Papers from Friedrich-Schiller-University Jena

Abstract: This paper studies the effects of social comparison on risk taking be- havior. In our framework, decision makers evaluate the consequences of their choices as changes with respect to both their own and their peers' conditions. We test experimentally whether different positions in the social ranking determine different risk attitudes. Subjects interact in a simulated workplace environment, where they receive possibly different wages as compensation for effort and then undertake a risky decision that may give them an extra gain. We find that social comparison matters for risk attitudes. In addition, risk aversion decreases with the size of social gains. As a consequence, subjects are less risk averse in social loss than in small social gain, whereas their risk attitudes do not differ between social loss and large social gain.

Keywords: Social comparison; risk aversion; interdependent preferences; reference point (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Date: 2014-11-25
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Journal Article: Social comparison and risk taking behavior (2017) Downloads
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