Identity and Choice Under Risk
70 Pages Posted: 18 Mar 2020
Date Written: January 21, 2020
Traditional gender norms have been blurring over the last years. Could this evolution have implications for economic decision-making? Identity theory posits that men who commit more to traditional male identity norms should take on more risk through a subjective-beliefs channel when their identity is salient, either because it is primed or threatened. I test these predictions using large-scale artefactual field experiments. Men whose identity is primed or threatened invest more in risky opportunities than control men and women. They become overconfident even in pure games of chance with no scope for skill, which is consistent with the subjective-beliefs channel identity theory postulates. The effects are stronger for men who commit more to male identity|older men and men in the Southern US. The recent blurring of traditional gender norms might thus imply a drop in aggregate risk taking over time, as men might reduce their willingness to take risks in disparate contexts.
Keywords: Cultural Economics, Subjective Beliefs, Oveconfidence, Norms, Stereotypes, Financial Decision-Making, Heterogeneous Agents.
JEL Classification: C91, C93, D03, D14, G02, J16, Z13
Suggested Citation: Suggested Citation