Paul Clist, University of East Anglia

“Risk Taking in a Social Context: Efficiency Matters”

Abstract

Risk and social preferences have typically been examined independently, with recent exceptions arguing a combination of ex-ante (focusing on expected values) and ex-post (focusing on final outcomes) interpretations of social preferences are needed to explain risky choices in social contexts. We add to this the importance of efficiency considerations. For this, we present evidence from a lab-in-the-field experiment in rural Uganda. Participants take a risky choice for themselves and an anonymous other person, under different risk correlations. Classifying subjects, we find that efficiency-seeking is the largest category, followed by ex-post inequality aversion, and lastly ex-ante inequality aversion. This is robust to different partners, rounds and definitions. We also find that efficiency-seeking is more common among women, while men are more likely classified as being motivated by ex-ante inequality aversion.

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