Risk-taking in social settings: Group and peer effects

Spiros Bougheas, Jeroen Nieboer and Martin Sefton

No 2013-04, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare consultation to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmark treatments replicate findings that groups take more risk than individuals in the investment task; content analysis of group discussions reveals that higher risktaking in groups is positively correlated with mentions of expected value. In our consultation treatments, we find evidence of peer effects: decisions within the peer group are significantly correlated. However, average risk-taking after consultation is not significantly different from isolated individual choices. We also find that risk-taking after consultation is not affected by adding a feedback stage in which subjects see the choices of their consultation peers.

Keywords: experimental economics; choice under risk; advice; social influence; peer effects (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-exp, nep-net, nep-soc and nep-ure
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Citations: View citations in EconPapers (46)

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Related works:
Journal Article: Risk-taking in social settings: Group and peer effects (2013)
Working Paper: Risk Taking in Social Settings: Group and Peer Effects (2013)
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