TY - JOUR
T1 - Improving One's Choices by Putting Oneself in Others' Shoes – An Experimental Analysis
AU - Li, Zhihua
AU - Rohde, Kirsten
AU - Wakker, Peter
PY - 2017/2/1
Y1 - 2017/2/1
N2 - This paper investigates how letting people predict others’ choices under risk affects subsequent own choices. We find an improvement of strong rationality (risk neutrality) for losses in own choices, but no such improvement for gains. There is no improvement of weak rationality (avoiding preference reversals). Overall, risk aversion in own choices increases. Conversely, for the effects of own choices on predicting for others, the risk aversion predicted in others’ choices is reduced if preceded by own choices, for both gains and losses. Remarkably, we find a new probability matching paradox at the group level. Relative to preceding studies on the effects of predicting others’ choices, we added real incentives, pure framing effects, and simplicity of stimuli. Our stimuli were maximally targeted towards our research questions.
AB - This paper investigates how letting people predict others’ choices under risk affects subsequent own choices. We find an improvement of strong rationality (risk neutrality) for losses in own choices, but no such improvement for gains. There is no improvement of weak rationality (avoiding preference reversals). Overall, risk aversion in own choices increases. Conversely, for the effects of own choices on predicting for others, the risk aversion predicted in others’ choices is reduced if preceded by own choices, for both gains and losses. Remarkably, we find a new probability matching paradox at the group level. Relative to preceding studies on the effects of predicting others’ choices, we added real incentives, pure framing effects, and simplicity of stimuli. Our stimuli were maximally targeted towards our research questions.
KW - risk attitudes
KW - framing effects
KW - self-other discrepancy
KW - predicting others' choices
KW - social comparisons
U2 - 10.1007/s11166-017-9253-3
DO - 10.1007/s11166-017-9253-3
M3 - Article
SN - 0895-5646
JO - Journal of Risk and Uncertainty
JF - Journal of Risk and Uncertainty
ER -