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Social Influences on Risk Attitudes: Applications in Economics

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Handbook of Risk Theory

Abstract

Economic research on risk attitudes has traditionally focused on individual decision-making issues, without any consideration for potential social influences on preferences. This has been changing rapidly over the last years, with economists often taking inspiration from earlier psychological research in their increasing consideration of social aspects in decision-making under risk. We provide a broadly conceived overview of the recent literature, defining four different categories of social influences on economic decisions under risk: (1) the observation of other agents’ outcomes; (2) the observation of the decision maker’s outcomes by other agents; (3) the direct effect of the decision maker’s choices on other agents’ outcomes; and (4) the direct dependency of the decision maker’s outcomes on other agents’ choices. While many promising insights have been gained over the last few years, several shortcomings and inconsistencies in our current understanding of social influences on decision-making under risk are pointed out. The overview concludes with a discussion of two real-world applications – agency in financial markets and climate change – that prominently show the importance of furthering our knowledge in this area. In order to achieve such increased knowledge, a much deeper integration of currently dispersed disciplinary knowledge in the social sciences seems crucial.

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Authors and Affiliations

  1. Tilburg Institute of Behavioral Economics Research, Department of Social Psychology & Center, Tilburg University, P.O. Box 90153, 5000 LE, Tilburg, The Netherlands

    Dr. Stefan T. Trautmann

  2. Institut für Volkswirtschaftslehre, Ludwig-Maximilians-Universität München, Giselastraße, 10, Zimmer 313, 80802, Munich, Germany

    Dr. Ferdinand M. Vieider

Authors
  1. Dr. Stefan T. Trautmann
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  2. Dr. Ferdinand M. Vieider
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Correspondence to Stefan T. Trautmann .

Editor information

Editors and Affiliations

  1. Philosophy Department Faculty of Technology, Policy and Management, Delft University of Technology, Delft, The Netherlands

    Sabine Roeser

  2. Philosophy Department, University of Twente, Enschede, The Netherlands

    Sabine Roeser

  3. Human Technology Center, RWTH Aachen University, Aachen, Germany

    Rafaela Hillerbrand

  4. Department of Plant Physiology and Forest Genetics, Swedish University of Agricultural Sciences, Uppsala, Sweden

    Per Sandin

  5. Section for Philosophy and Ethics, Eindhoven University of Technology, Eindhoven, The Netherlands

    Martin Peterson

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Trautmann, S.T., Vieider, F.M. (2012). Social Influences on Risk Attitudes: Applications in Economics. In: Roeser, S., Hillerbrand, R., Sandin, P., Peterson, M. (eds) Handbook of Risk Theory. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-1433-5_22

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  • DOI: https://doi.org/10.1007/978-94-007-1433-5_22

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