Citation

Gantner A, Kerschbamer R. J. Risk Uncertain. 2018; 56(2): 141-164.

Affiliation

Department of Economics, University of Innsbruck, Universitaetsstrasse 15, 6020 Innsbruck, Austria.

Copyright

(Copyright © 2018, Holtzbrinck Springer Nature Publishing Group)

DOI

10.1007/s11166-018-9275-5

PMID

29937628

PMCID

PMC5978880

Abstract

This paper identifies convex distributional preferences as a possible cause for the empirical observation that agents belonging to the same group tend to behave similarly in risky environments. We first show theoretically that convex distributional preferences imply social interaction effects in risky choices in the sense that observing a peer choose a risky (safe) option increases the agent's incentive to choose the risky (safe) option as well, even when lotteries are stochastically independent and the agent can only observe the lottery chosen by the peer but not the corresponding outcome. We then confirm our theoretical predictions experimentally.

Language: en

Keywords

Peer effects; Risky choices; Social interaction effects; Social preferences