Social comparison and risk taking behavior

This paper studies the effects of social comparison on risk taking behavior. In our theoretical framework, decision makers evaluate the consequences of their choices relative to both their own and their peers’ conditions. We test experimentally whether the position in the social ranking affects risk attitudes. Subjects interact in a simulated workplace environment where they perform a work task, receive possibly different wages, and then undertake a risky decision that may produce an extra gain. We find that social comparison matters for risk attitudes. Subjects are more risk averse in the presence of small social gain than social loss. In addition, risk aversion is decreasing in the size of the social gain.     

Framing effects in the evaluation of multiple risk reduction

We studied how evaluation of changes in low-probability risks are affected by reference points and framing effects. Subjects considered hypothetical situations with one or two low-probability risks. Different frames were used to describe changes in risk levels. In the first experiment, subjects chose between risk-reduction options that achieved the same overall risk reduction: large reduction of one risk vs. equal (smaller) reduction of two risks. When the risks were described as losses relative to the no-risk ideal, more subjects were indifferent between the options than when the same options were described as gains relative to the status quo. In the latter case subjects preferred equal reduction of both risks, unless one risk could be reduced to zero. In a related experiment, subjects were less willing to pay any price for a commodity that carried small increases in two risks than for a commodity carrying a comparable large increase in one risk. In other experiments, subjects evaluated single changes in risks rather than comparing or evaluating pairs of changes. Subjects again placed particularly high value on reducing any risks to zero, and they were even more inclined to do so when some other risk would also be reduced to zero. In a final experiment, elimination of risk was found to be less highly valued if its source was not fully eliminated, and a status-quo effect was found. The findings are interpreted in terms of reference theories of choice.     

The effect of the background risk in a simple chance improving decision model

We experimentally investigate the effect of an independent and exogenous background risk to initial wealth on subjects’ risk attitudes and explore an appropriate incentive mechanism when identical or similar tasks are repeated in an experiment. Taking a simple chance improving decision model under risk where the winning probabilities are negatively related to the potential gain, we find that such a background risk tends to make risk-averse subjects behave more risk aversely. Furthermore, we find that risk-averse subjects tend to show decreasing absolute risk aversion (DARA), and that a random round payoff mechanism (RRPM) would control the possible wealth effect. This suggests that RRPM would be a better incentive mechanism for an experiment where repetition of a task is used.

Absolute and relative risk aversion: An experimental study

Kenneth Arrow posed the hypotheses that investors reveal decreasing absolute risk aversion (DARA) and increasing relative risk aversion (IRRA). It is very difficult to empirically test these two hypotheses since one needs to analyze an investor's investment decisions at various points in his/her economic life cycle as the investor's wealth varies. An experimental study is conducted to test these two hypotheses when the subject's wealth varies depending on his/her investment performance. The experiment involves an actual money gain or loss which is indexed to the individual's investment performance. It is found that DARA is indeed strongly supported, but IRRA is rejected.     

Moral Emotions and Social Activism: The Case of Animal Rights

Why do some people and not others become involved in social movements? We examined the relationships between a moral emotion—disgust—and animal activism, attitudes toward animal welfare, and consumption of meat. Participants were recruited through two social networking websites and included animal activists, promoters of animal use, and participants not involved in animal-related causes. They took an online survey which included measures of sensitivity to visceral disgust, attitudes toward animal welfare, and frequency of meat eating. Animal activists were more sensitive to visceral disgust than were promoters of animal use or nonaligned participants. Disgust sensitivity was positively correlated with attitudes toward animal welfare but not with meat consumption. The relationship between animal activism and vegetarianism was complex; nearly half of animal activists ate meat, and half of the vegetarians did not consider themselves to be animal activists. We argue that conflicts over the moral status of animals reflect fundamental differences in moral intuitions.     

An Experimental Test of Loss Aversion

This paper experimentally investigates a preference condition for loss aversion in the framework of cumulative prospect theory (CPT). We propose the concepts of absolute and relative loss premiums in order to measure the extent of loss aversion and to derive notions of increasing, constant, and decreasing loss aversion. While in only one of the 28 choice situations analyzed loss neutrality and loss seeking can be rejected, about 51% of all choices are loss averse and, due to the large extent of loss aversion revealed by these choices, the average loss premium is positive for most choice situations. Female subjects exhibit both a more frequent occurrence and a larger extent of loss aversion.     

Divided Loyalties? Understanding Variation in Latino Attitudes Toward Immigration*

Objective. In this article, we develop and test a model of competing theoretical explanations of Latino attitudes toward immigration; specifically examining their policy preferences on legal immigration, illegal immigration, and a proposed policy for dealing with illegal immigrants. We also consider whether Latino attitudes toward legal and illegal immigration are related and comprise a single coherent structure. Method. Using data from a 2004 national survey of Latinos, we perform regression, logit, and ordered logit analyses to examine the determinants of Latino attitudes toward immigration. Results. We highlight three important findings. First, our results demonstrate “within‐group” differences in immigration attitudes among Latinos, based on both national origin and generational status; we find that Mexicans are more pro‐immigration than Latinos from other countries and that foreign‐born Latinos have much more positive attitudes about immigration than second‐generation and third‐generation Latinos. Second, we find that Latino support for various aspects of immigration is primarily a function of ethnic and linguistic identity and attachment to American culture, with self‐interest, contextual variables, and political and demographic attributes playing a smaller, more specialized role. Finally, we demonstrate that Latino attitudes toward legal and illegal immigration are highly interrelated. Conclusion. There is a coherent structure underlying Latino attitudes toward legal immigration, illegal immigration, and a policy option for dealing with illegal immigrants. Our tests of competing theoretical approaches reveal the importance of national origin and ethnic attachment and acculturation in explaining differences among Latinos on their attitudes toward immigration.     

Community attitudes on the family of issues surrounding the death of terminal patients

In two studies, respondents made recommendations for the medical treatment of a terminally ill elderly woman. The woman was or was not experiencing intractable pain, and had requested either heroic medical efforts or euthanasia. Respondents' recommendations were influenced by both the specific wishes of the patient and the pain the person was experiencing. However, participants were not completely swayed by the patient's wishes: only about half of the sample recommended euthanasia even when the patient was in intractable pain and had requested death; also, many subjects would not resuscitate the patient whose heart or lungs failed, even though she had requested heroic measures. Respondent attitudes toward euthanasia predicted recommendations in the expected directions. We suggest that there is less dissent on the issues that arise for medical treatments at the end of life than has been widely assumed.     

Risk attitudes in a social context

Many experiments have demonstrated that when evaluating payoffs, people take not only their own payoffs into account, but also the payoffs of others in their social environment. Most of this evidence is found in settings where payoffs are riskless. It is plausible that if people care about the payoffs of others, they do so not only in a riskless context, but also in a risky one. This suggests that an individual’s decision making under risk depends on the risks others in his or her environment face. This paper is the first to test whether individuals’ risk attitudes are affected by the risks others face. The results show that risk attitudes appear to be less affected by others’ risks than expected, even though the same subjects do show concerns for inequality in a riskless setting. Interestingly, we find that people prefer risks to be independent across individuals in society rather than correlated.     

Temporal discounting of gains and losses of time: An experimental investigation

This paper investigates “asymmetries” between non-monetary gains and losses in intertemporal choice. We considered gains and losses of spare/working time with respect to a reference duration defined in a working contract. Specifically, we elicited a behavioral model of intertemporal choice that accounts for a gain/loss-dependent discounting function and a reference-dependent utility. Additionally, we did not impose preference for the present (positive discounting) and allowed for both decreasing and increasing impatience. While our results are standard regarding the discount of money (our baseline treatment), our subjects heavily discounted gains of time. More patience was observed for losses of time and a sizable portion of subjects even exhibited negative discounting, i.e. they preferred to expedite losses of time. Our econometric estimations also reveal a much larger heterogeneity of behavior in terms of both utility and discounting for gains and losses of spare time as compared to money.     

For whom does social comparison induce risk-taking?

A ‘bonus culture’ among financial traders has been blamed for the excessive risk-taking in the run-up to the latest financial crisis. I show that when individuals are more social gain seeking than social loss averse (i.e. gloating is stronger than envy), social comparison predicts more risk-taking as well as a preference for negatively correlated gambles. Testing these two joint propositions in a laboratory experiment, I find that preference for positively or negatively correlated outcomes is highly correlated with risk-taking in a social risky investment task. While only a third of subjects prefer negatively correlated outcomes in a peer comparison setting, in line with relatively stronger social gain seeking, those subjects invest on average 50 % more in a risky gamble in their peer comparison setting than a reference group that made the same decision in an isolated individual setting. Subjects with a preference for positively correlated outcomes, in line with relatively stronger social loss aversion, do not show a higher propensity to invest in a risky gamble compared to the individual reference group.     

Intergroup Competition and Attitudes Toward Immigrants and Immigration: An Instrumental Model of Group Conflict

High levels of worldwide migration paired with increasingly negative attitudes toward immigrants and immigration in host countries indicate that it is crucial to gain an understanding of the bases of these attitudes. This article discusses one determinant of negative attitudes toward immigrants and immigration: perceived competition for resources. We present our instrumental model of group conflict, which suggests that competition for resources, and attempts to remove this competition, are important determinants of intergroup attitudes and behavior. We then review relevant research on perceived competition and attitudes toward immigrants and immigration. We conclude by discussing the implications of this research for attempts to alleviate tension between immigrants and members of host populations, and for our more general model of group conflict.     

Choosing a gambling partner: testing a model of mutual insurance in the lab

In this study, we investigate how economic agents choose gambling partners and how paired risky choices differ from individual ones. To this aim, we develop a simple model and design a laboratory experiment that allows us to compare individual versus paired decisions across two treatments, where pairs are, respectively, exogenously and endogenously formed. In both treatments, paired subjects decide individually and independently how to allocate their wealth over a portfolio of lotteries and fully commit to share any winnings. The main result from our experiment is that whenever agents are allowed to choose a gambling partner they decide to team up with other agents who display the same degree of risk aversion as themselves. Moreover, paired choices consistently involve higher risk taking than individual choices. This finding is more evident when information on subjects’ risk attitudes is made available and when subjects team up in homogeneous pairs, thereby confirming that subjects successfully exploit the benefits of mutual insurance.     

How Appreciated Do Wives Feel for the Housework They Do?*

Objective. Sense of appreciation for the work one does contributes to subjective well‐being and relational satisfaction, but few studies examine the factors that may affect levels of recognition for household labor. We formulate and test hypotheses based on the effort‐reward imbalance model in occupational health research to investigate the extent to which married women feel that the work they do around the house is appreciated. Methods. We use data from a sample of married women from the 1987–1988 National Survey of Families and Households to test these hypotheses. Results. We find that wives' absolute time spent in housework and the share they do are both important in shaping their perception of appreciation for housework. Women who hold relatively liberal attitudes toward gender roles and those who have more options outside marriage are less likely to feel appreciated. Finally, wives who often share time with their husbands tend to report higher levels of gratitude for their work at home than those who do so rarely. Conclusions. This study suggests that the literature on psychological and relational outcomes of household labor should go beyond amounts and divisions of housework to include beliefs about roles, couples' dependency, and their relationship.     

Dynamics in risk taking with a low-probability hazard

The experiment reported in this paper identifies the effects of experience on revealed attitudes toward risk. Subjects in the experiment encountered an uncertain risk of experiencing a negative income shock over multiple periods and were able to purchase insurance at the start of each period. Subjects engaged in greater risk taking, insuring less frequently, when faced with the same risk over multiple periods. Subjects weighted experienced outcomes proportionately, in a manner consistent with rational Bayesian inference and contrary to the theory that individuals exhibit recency bias. On the other hand, subjects assigned a greater weight to outcomes that directly impacted their earnings compared to observed outcomes that had no effect on income. Unexplained autocorrelation across subjects’ choices suggests that inertia also plays an important role in repeated risk settings. I explore the relevance of these findings to public policy aimed at influencing market outcomes in the presence of infrequent environmental hazards.     

Social comparison and risky choices

Theories (and experiments) on decision making under risk typically ignore (and exclude) a social context. We explore whether this omission is detrimental. To do so we experimentally investigate the simplest possible situation with both social comparison and risk: participants choose between two lotteries while a referent faces a fixed payoff. Participants are more risk averse when they can earn at most as much as their referent (loss situation) than when they are ensured they will earn at least as much as their referent (gain situation). Prospect theory with a social reference point would predict the exact opposite behavior. These results show that straightforward extensions of existing theories to allow for social comparison do not provide accurate predictions.     

SexualPrejudice and Gender: Do Heterosexuals' Attitudes Toward Lesbians and Gay Men Differ?

This article explores the question of whether and how heterosexuals' attitudes toward lesbians differ from their attitudes toward gay men. Data from a 1997 national survey are presented to show that heterosexual women generally hold similar attitudes toward gay men and lesbians, whereas heterosexual men are more likely to make distinctions according to gender. Moreover, men's attitudes toward lesbians are susceptible to situational manipulations. Nevertheless, the underlying unity of attitudes toward lesbians and gay men is demonstrated by the fact that they are highly correlated for both heterosexual men and women. It is suggested that heterosexuals' attitudes toward gay people are organized both in terms of minority group politics and personal sexual and gender identity and that attitudes toward lesbians are most likelyto be differentiated from attitudes toward gay men in the latter realm.     

Ambiguity attitudes and social interactions: An experimental investigation

This paper reports the results of experiments testing prevalence of non-neutral ambiguity attitudes and how these attitudes change as a result of interpersonal interactions. To address the first question we conducted experiments involving individual choice between betting on ambiguous and unambiguous events of the subject’s choice. We found that a large majority of subjects display ambiguity neutral attitudes, many others display ambiguity incoherent attitudes, and few subjects display either ambiguity-averse attitudes or ambiguity-seeking attitudes. To address the second question we designed a new experiment with a built-in incentive to persuade. We found that interpersonal interactions without incentives to persuade have no effect on behavior. However, when incentives were introduced, the ambiguity neutral subjects were better able to persuade ambiguity seeking and ambiguity incoherent subjects to adopt ambiguity neutral choice behavior and, to a lesser extent, also ambiguity averse subjects.     

Children in De Facto Relationships

This paper compares the family situation of children living with de facto couples with that of children living with legally married couples and examines the attitudes of de facto couples toward having children. De facto couples with ex-nuptial children were in a less favourable socio-economic situation than either de facto couples with step children or married couples with children. Differences were also observed among de facto couples with and without ex-nuptial children and married couples in their attitudes toward having children ex-nuptially. However, de facto partners with children and married partners with children did not differ in their attitudes toward children.     

Empathic Action and Family Resilience: A Narrative Examination of the Benefits of Helping Others

ABSTRACT

Empathy is identified as a protective factor that has been helpful for children considered at high risk for poor mental health and social functioning due to experiencing stressful circumstances such as family violence, substance abuse of a parent, or poverty. Yet, little is known about its relevance to a family's ability to overcome adversity. This study examined the narratives of 20 resilient families who maintained family functioning despite experiencing a multitude of risk factors including poverty, death of a child, significant health problems, or substance abuse problems. Narrative analysis was used to identify the ways families situated empathic actions within their stories of resilience. Findings suggest families developed increased compassion for others as a result of their own experiences with loss, trauma, or stress and discussed how helping others increased their ability to cope with the challenges they faced. Future research and practice implications are outlined and support the usefulness of strengths-based concepts and interventions.