Improving One's Choices by Putting Oneself in Others' Shoes – An Experimental Analysis

Research output: Contribution to journalArticle

Authors

Colleges, School and Institutes

External organisations

  • Erasmus School of Economics, Erasmus University Rotterdam

Abstract

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.

Details

Original languageEnglish
JournalJournal of Risk and Uncertainty
Publication statusPublished - 1 Feb 2017

Keywords

  • risk attitudes , framing effects , self-other discrepancy , predicting others' choices , social comparisons