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Representation and Social Regret in Risk-Taking

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  • Doruk Iris

    (Department of Economics, Sogang University, Seoul)

Abstract

Representing others brings responsibility and fear of letting others down (social regret). We incorporate these phenomena in a theoretical model and provide a psychological perspective to explain the individual-group discontinuity in risk-taking activities. A representative makes a state-wise comparison of the consequences of her decision and an unchosen advice given by a group member. Social regret-aversion renders extreme utility differences salient and allows both risky and cautious shifts.

Suggested Citation

  • Doruk Iris, 2017. "Representation and Social Regret in Risk-Taking," Working Papers 1701, Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy).
    • Handle: RePEc:sgo:wpaper:1701
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    References listed on IDEAS

    as
    1. Charness, Gary & Jackson, Matthew O., 2009. "The role of responsibility in strategic risk-taking," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 241-247, March.
    2. Matthias Sutter, 2009. "Individual Behavior and Group Membership: Comment," American Economic Review, American Economic Association, vol. 99(5), pages 2247-2257, December.
    3. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    4. Song, Fei, 2008. "Trust and reciprocity behavior and behavioral forecasts: Individuals versus group-representatives," Games and Economic Behavior, Elsevier, vol. 62(2), pages 675-696, March.
    5. Doruk İriş & Jungmin Lee & Alessandro Tavoni, 2015. "Delegation and public pressure in a threshold public goods game: theory and experimental evidence," GRI Working Papers 186, Grantham Research Institute on Climate Change and the Environment.
    6. Quiggin, John, 1994. "Regret Theory with General Choice Sets," Journal of Risk and Uncertainty, Springer, vol. 8(2), pages 153-165, March.
    7. Han Bleichrodt & Peter P. Wakker, 2015. "Regret Theory: A Bold Alternative to the Alternatives," Economic Journal, Royal Economic Society, vol. 0(583), pages 493-532, March.
    8. Gary Charness & Matthias Sutter, 2012. "Groups Make Better Self-Interested Decisions," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 157-176, Summer.
    9. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
    10. Ertac, Seda & Gurdal, Mehmet Y., 2019. "Preference Communication and leadership in group decision-making," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 80(C), pages 130-140.
    11. Doruk İriş & Jungmin Lee & Alessandro Tavoni, 2015. "Delegation and public pressure in a threshold public goods game: theory and experimental evidence," GRI Working Papers 186, Grantham Research Institute on Climate Change and the Environment.
    12. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
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    Cited by:

    1. Rusi Jaspal, 2022. "Chemsex, Identity and Sexual Health among Gay and Bisexual Men," IJERPH, MDPI, vol. 19(19), pages 1-16, September.

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    More about this item

    Keywords

    Social representation; Social regret-aversion; Risk-taking; Individual-group discontinuity; Risky shift; Cautious shift.;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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