Relative Risk Taking and Social Curiosity
Jérémy Celse (),
Alexandros Karakostas and
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Alexandros Karakostas: School of Economics, University of Queensland, Brisbane, Australia
No 648, Discussion Papers Series from University of Queensland, School of Economics
We present an experiment providing (a) a horse race among different models combining social preferences and risk preferences, and (b) a test of whether agents are socially curious, that is wanting to know about the risk taking of others and the outcomes of their risk taking. We distinguish outcome driven models (that is, models where agents care about the earning outcomes for themselves and others) from action driven models (that is, models where agents care about one’s risk taking actions relative to the actions of others). We embed outcome and action driven competitive preferences, inequality aversion, conformism, and social loss aversion, within a single general theoretical framework. We find that competitive preferences models best explain investment decisions in our setting, with almost 50% of subjects influenced both by their co-participants’ actions and outcomes. About 90% of subjects seek social information when it is free. When it is costly, 30% of subjects seek social information if the information is instrumental for their own investment decision and about 15% seek social information even if it is not. Competitive preferences can help explain social curiosity.
Keywords: Risk; curiosity; peer effects; social preferences; competitive preferences; social comparison. (search for similar items in EconPapers)
JEL-codes: C91 D81 D91 G11 G22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm and nep-isf
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:648
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