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Improving one’s choices by putting oneself in others’ shoes – An experimental analysis

Author

Listed:
  • Zhihua Li

    (University of Warwick)

  • Kirsten I. M. Rohde

    (Erasmus University Rotterdam)

  • Peter P. Wakker

    (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.

Suggested Citation

  • Zhihua Li & Kirsten I. M. Rohde & Peter P. Wakker, 2017. "Improving one’s choices by putting oneself in others’ shoes – An experimental analysis," Journal of Risk and Uncertainty, Springer, vol. 54(1), pages 1-13, February.
    • Handle: RePEc:kap:jrisku:v:54:y:2017:i:1:d:10.1007_s11166-017-9253-3
    DOI: 10.1007/s11166-017-9253-3
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    Cited by:

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    3. Mulligan, Karen & Baid, Drishti & Doctor, Jason N. & Phelps, Charles E. & Lakdawalla, Darius N., 2024. "Risk preferences over health: Empirical estimates and implications for medical decision-making," Journal of Health Economics, Elsevier, vol. 94(C).
    4. Montinari, Natalia & Rancan, Michela, 2020. "A friend is a treasure: On the interplay of social distance and monetary incentives when risk is taken on behalf of others," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 86(C).
    5. Raffaelli, R. & Menapace, L., 2018. "Indirect questioning as a debiasing mechanism in preference elicitation for sustainable food? First evidence from a Discrete Choice Experiment," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277039, International Association of Agricultural Economists.

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