Deciding for Oneself or Others: A structural approach on risky decision making for others
Keywords
No Thumbnail Available
Authors
Issue Date
2018-08-15
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
This paper examines whether an individual’s risk-taking changes when s/he is taking a decision for someone else. Using an online experiment with a mixed subject pool of bankers, managers and students, with gain loss and mixed prospects, we constructed a structural model based on prospect theory. We find that making a decision on behalf of someone else leaves the utility curvatures unaffected. But does result in an accentuation of the four-fold pattern of risk preferences. In addition, we also conclude that decision making for others leads to a reduction of loss aversion. Furthermore, we find an increase in probabilistic sensitivity for both the gain as loss domain, the above results hold even when controlled for order.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen