Review of Behavioral Economics > Vol 4 > Issue 2

Taking Risk with Other People’s Money: Does Information about the Others Matter?

Miguel Luzuriaga, University of Applied Sciences, Neu-Ulm, Germany, miguel.luzuriaga@hs-neu-ulm.de
 
Suggested Citation
Miguel Luzuriaga (2017), "Taking Risk with Other People’s Money: Does Information about the Others Matter?", Review of Behavioral Economics: Vol. 4: No. 2, pp 107-133. http://dx.doi.org/10.1561/105.00000061

Published: 13 Sep 2017
© 2017 M. Luzuriaga
 
Subjects
Financial markets: Anomalies and behavioral finance,  Behavioral Decision Making,  Principal-Agent
 
Keywords
JEL Codes: C91D81J16
GenderRiskExperiments
 

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In this article:
1. Introduction
2. Experimental Design and Procedure
3. Experimental Results
4. Discussion
5. Conclusion
References

Abstract

This paper experimentally investigates how people take risk with other people’s money, and specifically, whether risk-taking is influenced by information about others. Before choosing the degree of risk another person must bear, subjects get information about the other person’s gender and self-reported level of extroversion. There is no evidence that information about gender has an effect, and matters more for choosing on behalf of one’s-self than for choosing on behalf of others. Extroversion, however, has a significant effect. Here it matters more for choosing on behalf of others than on behalf of one’s-self. I also find that the own risk choices have a strong effect on choosing on behalf of others.

DOI:10.1561/105.00000061