Personality and Risk Aversion in Representative Decision Making

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Attila Cseh Luke Jones


We use a laboratory experiment to analyze how personality characteristics influence risk preference with and without randomly assigned anonymous dependents. In three treatments with dependents, we randomly group participants into pairs - a decision maker and a dependent. The decision maker of each pair faces a choice between a certain payment and a binary lottery of higher expected value. The decision maker role within each pair is either determined by random assignment (RANDOM), or earned based on performance in a pregame (MERIT1, MERIT2). We compare choices in the three treatments to choices of decision makers without a dependent (SELF). We find that individuals with higher scores on agreeableness are more likely to choose the safe option when their decision affects a dependent. We find that higher scores on neuroticism are associated with increased probability of safe choice if the decision maker position is earned (instead of assigned randomly). (C91, D91)

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