Social comparison and risk taking behavior

Astrid Gamba () and Elena Manzoni

No 266, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: We study theoretically and experimentally decision making under uncertainty in a social environment. We introduce an interdependent preferences model that assumes that the decision maker evaluates monetary outcomes in relation both with his individual and his social reference point. In the experiment we reproduce a workplace environment whereby subjects interact in an e ffort task, earn (possibly) diff erent wages from this task and then undertake a risky decision that may give them an extra bonus. Controlling for intrinsic risk attitudes, we find that both downward and upward social comparison strongly influence risk attitudes and that they both generate more risk loving behavior. Moreover, we fi nd that a propension to envy counterposes such eff ect, by increasing risk aversion.

Keywords: Social comparison; risk aversion; interdependent preferences; reference point (search for similar items in EconPapers)
JEL-codes: C91 D03 D81 (search for similar items in EconPapers)
Pages: 47
Date: 2014-01, Revised 2014-01
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Social comparison and risk taking behavior (2017)
Working Paper: Social comparison and risk taking behavior (2014)
Working Paper: Social Comparison and Risk Taking Behavior (2014)
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