Social Exchange and Risk and Ambiguity Preferences

33 Pages Posted: 29 Aug 2011  

John Engle

affiliation not provided to SSRN

Jim Engle-Warnick

McGill University - Department of Economics

Sonia Laszlo

McGill University - Department of Economics

Date Written: May 29, 2011

Abstract

We present an experiment in which we test for the effect of participating in a social exchange exercise on revealed risk and ambiguity preferences. In our experiments, subjects make choices over lotteries that reveal their risk and ambiguity preferences. They then participate with a small group in an unstructured on-line chat. After the chat, they reconsider their choices in the risk and ambiguity instruments. In a control session, different subjects view, but do not participate in, past chats. Through a content analysis we investigate the role of chat content and chat participation on changes in revealed preferences. We compare our results to the “Discovered Preferences Hypothesis” (Plott, 1996) and “Fact-Free Learning” (Aragones, Gilboa, Postlewaite, and Schmeidler, 2005).

Keywords: risk, ambiguity, preference, measurement, instruments, experimental economics, development economics, participatory development, social learning

Suggested Citation

Engle, John and Engle-Warnick, Jim and Laszlo, Sonia, Social Exchange and Risk and Ambiguity Preferences (May 29, 2011). CIRANO - Scientific Publications Forthcoming. Available at SSRN: https://ssrn.com/abstract=1919073 or http://dx.doi.org/10.2139/ssrn.1919073

John Engle

affiliation not provided to SSRN ( email )

Jim Engle-Warnick (Contact Author)

McGill University - Department of Economics ( email )

855 Sherbrooke Street West
Montreal, QC H3A 2T7
Canada

Sonia Laszlo

McGill University - Department of Economics ( email )

855 Sherbrooke Street West
Montreal, QC H3A 2T7
Canada

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