Deciding for Others Reduces Loss Aversion

Research output: Working paperResearch

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.
Original languageEnglish
Place of PublicationKbh
PublisherØkonomisk institut, Københavns Universitet
Number of pages38
Publication statusPublished - 2013
SeriesUniversity of Copenhagen. Institute of Economics. Discussion Papers
Number09
Volume2013
ISSN0902-6452

Bibliographical note

JEL classification: C91; D03; D81; G02

ID: 103545535