Preferences Over Social Risk

Abstract

We elicit individual preferences over social risk. We identify the extent to which these preferences are correlated with individual preferences over individual risk and individual preferences over the well-being of others. We examine these preferences in the context of laboratory experiments over small, anonymous groups, although the methodological issues extend to larger groups that form endogenously (e.g., families, committees, communities). We find that social risk attitudes can be closely approximated by individual risk attitudes. We find no evidence that subjects systematically reveal different risk attitudes in a social setting compared to when they solely bear the consequences individually.

Keywords: Risk aversion, experimenal economics, social choice

JEL Classification: D71, D63, D81