Other people’s money: The role of reciprocity and social uncertainty in decisions for others

Ivo Vlaev, Brian Wallace, Nicholas Wright, Antoinette Nicolle, Paul Dolan, Raymond Dolan

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
207 Downloads (Pure)

Abstract

Many important decisions are taken not by the person who will ultimately gain or lose from the outcome, but on their behalf by somebody else. We examined economic decision-making about risk and time in situations in which deciders chose for others who also chose for them. We propose that this unique setting, which has not been studied before, elicits perception of reciprocity that prompts a unique bias in preferences. We found that decision-makers are less patient (more discounting), and also more risk-averse for losses than gains, with other
peoples’ money, especially when their choices for others are more uncertain. Those results were derived by exploiting a computational modelling framework that has been shown to account for the underlying psychological and neural decision processes. We propose a novel theoretical mechanism – precautionary preferences under social uncertainty, which explains the findings. Implications for future research and alternative models are also discussed.
Original languageEnglish
Pages (from-to)59-80
JournalJournal of Neuroscience, Psychology, and Economics
Volume10
Issue number2-3
DOIs
Publication statusPublished - 30 Jun 2017

Keywords

  • decision making
  • risk preferences
  • time preferences
  • self-other differences
  • reciprocity

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