Working Paper No. 976

Deciding for Others Reduces Loss Aversion

Published: September 17, 2013Pages: 38Keywords: Risk taking; Loss aversion; ExperimentJEL-codes: C91; D03; D81; G02
Published version

Deciding for Others Reduces Loss Aversion Ola Andersson, Håkan J. Holm, Jean-Robert Tyran and Erik Wengström

We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded. In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation, we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices.

Ola Andersson


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Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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