An Uncertainty Management Perspective on Long-Run Impacts of Adversity: The Influence of Childhood Socioeconomic Status on Risk, Time, and Social Preferences

Forthcoming in the Journal of Experimental Social Psychology

36 Pages Posted: 18 Sep 2017 Last revised: 5 Aug 2018

See all articles by Dorsa Amir

Dorsa Amir

Yale University

Matthew Jordan

Yale University

David G. Rand

Massachusetts Institute of Technology (MIT)

Date Written: July 28, 2018

Abstract

While there has been a recent increase in focus on the role of early life socioeconomic status (SES) on preferences and decision-making, there is still debate surrounding the proper theoretical framework for understanding such effects. Some have argued that early life SES can fundamentally shift time preferences per se, such that those from low SES backgrounds favor current rewards over future rewards. Others have argued that, while early life SES has lasting effects on behavior, such effects are only observable in the presence of salient cues to mortality. Here, we propose an alternative framework that centers on environmental uncertainty. In this uncertainty management framework, early life deprivation promotes the development of strategies that minimize the downside costs of uncertainty across domains. We argue that this focus on managing uncertainty results in greater risk-aversion, present- orientation, and prosociality. Furthermore, these effects need not be dependent on salient cues to mortality. Across four large samples of participants (total N=4,714), we find that childhood deprivation uniquely predicts greater risk-aversion (both incentivized and hypothetical) and greater prosociality in economic games. Childhood deprivation also predicts greater present-orientation, but not above-and beyond current SES. We further find that mortality cues are not necessary to elicit these differences. Our results support an uncertainty management perspective on the effects of childhood SES on risk, time, and social preferences.

Keywords: Early Life Environment, Experimental Game Theory, Socioeconomic Status, Economic Games, Risk Preferences, Time Preferences

Suggested Citation

Amir, Dorsa and Jordan, Matthew and Rand, David G., An Uncertainty Management Perspective on Long-Run Impacts of Adversity: The Influence of Childhood Socioeconomic Status on Risk, Time, and Social Preferences (July 28, 2018). Forthcoming in the Journal of Experimental Social Psychology . Available at SSRN: https://ssrn.com/abstract=3037019 or http://dx.doi.org/10.2139/ssrn.3037019

Dorsa Amir

Yale University ( email )

New Haven, CT 06520
United States

Matthew Jordan (Contact Author)

Yale University ( email )

New Haven, CT 06520
United States

David G. Rand

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

HOME PAGE: http://www.daverand.org

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