Deciding for Others Reduces Loss Aversion
Research output: Working paper › Research
We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from
the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded. In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation,
we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices.
the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded. In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation,
we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices.
Original language | English |
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Place of Publication | Kbh |
Publisher | Økonomisk institut, Københavns Universitet |
Number of pages | 38 |
Publication status | Published - 2013 |
Series | University of Copenhagen. Institute of Economics. Discussion Papers |
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Number | 09 |
Volume | 2013 |
ISSN | 0902-6452 |
Bibliographical note
JEL classification: C91; D03; D81; G02
- Faculty of Social Sciences - Risk taking, loss aversion, experiment
Research areas
ID: 103545535