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Publisher DOI: 10.1007/s10683-017-9541-4
Title: Higher-order risk preferences in social settings
Language: English
Authors: Heinrich, Timo  
Mayrhofer, Thomas 
Keywords: Communication; Experiment; Prudence; Responsibility; Risk aversion; Temperance
Issue Date: 8-Sep-2017
Publisher: Springer Science + Business Media B.V.
Source: Experimental Economics 21 (2): 434-456 (2018)
Abstract (english): 
We study prudence and temperance (next to risk aversion) in social settings. Previous experimental studies have shown that these higher-order risk preferences affect the choices of individuals deciding privately on lotteries that only affect their own payoff. Yet, many risky and financially relevant decisions are made in the social settings of households or organizations. We elicit higher-order risk preferences of individuals and systematically vary how an individual’s decision is made (alone or while communicating with a partner) and who is affected by the decision (only the individual or the partner as well). In doing so, we can isolate the effects of other-regarding concerns and communication on choices. Our results reveal that the majority of choices are risk averse, prudent, and temperate across social settings. We also observe that individuals are influenced significantly by the preferences of a partner when they are able to communicate and choices are payoff-relevant for both of them.
DOI: 10.15480/882.3398
ISSN: 1573-6938
Journal: Experimental economics 
Document Type: Article
Funded by: Deutsche Forschungsgemeinschaft (DFG) (FOR 655) 
Bundesministerium für Bildung und Forschung (IN-EAST School of Advanced Studies (Grant No. 01UC1304) ) 
More Funding information: Financial support from the German Research Foundation (DFG) through FOR 655 and from the German Federal Ministry of Education and Research (BMBF) through the IN-EAST School of Advanced Studies (Grant No. 01UC1304) is gratefully acknowledged.
License: CC BY 4.0 (Attribution) CC BY 4.0 (Attribution)
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