Deciding for Others Reduces Loss Aversion
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Deciding for Others Reduces Loss Aversion. / Andersson, Ola ; Holm, Håkan J. ; Tyran, Jean-Robert Karl; Wengström, Erik Roland.
Kbh : Økonomisk institut, Københavns Universitet, 2013.Research output: Working paper › Research
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TY - UNPB
T1 - Deciding for Others Reduces Loss Aversion
AU - Andersson, Ola
AU - Holm, Håkan J.
AU - Tyran, Jean-Robert Karl
AU - Wengström, Erik Roland
N1 - JEL classification: C91; D03; D81; G02
PY - 2013
Y1 - 2013
N2 - 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.
AB - 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.
KW - Faculty of Social Sciences
KW - Risk taking
KW - loss aversion
KW - experiment
M3 - Working paper
T3 - University of Copenhagen. Institute of Economics. Discussion Papers
BT - Deciding for Others Reduces Loss Aversion
PB - Økonomisk institut, Københavns Universitet
CY - Kbh
ER -
ID: 103545535