Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92981
Authors: 
Schwerter, Frederik
Year of Publication: 
2013
Series/Report no.: 
Bonn Econ Discussion Papers 11/2013
Abstract: 
This study test whether social reference points impact individual risk taking. In a laboratory experiment, decision makers observe the earnings of a peer subject before making a risky choice. We exogenously manipulate the peer earnings across two treatments. We find a significant treatment effect on risk taking: decision makers vary their risk taking in order to surpass or stay ahead of their peer. Our findings are consistent with a social-comparison-based, reference-dependent preference model that formalizes relative concerns via social loss aversion. Additionally, we relate our findings to the impact of private reference points on risk taking.
Subjects: 
Social Comparisons
Social Loss Aversion
Reference-Dependent Preferences
Lab Experiments
Relative Income Concerns
JEL: 
C91
D03
D81
Document Type: 
Working Paper

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