Risk taking and economic outcomes : the role of social context
In my thesis I analyze risk taking and resulting economic outcomes in different settings with a particular focus on the social context. Thereby, I contribute to answering the question whether and how the social context influences preferences and thereby economic outcomes. My thesis consists of two parts. The first part, composed of two papers, addresses economic consequences in an environment where risk taking is inherent – the gambling market. Existing regulations are discussed from an economic perspective and possible new regulations are proposed. It, therefore, provides new insights and arguments on the debate on the optimal regulation of gambling, which directly affects economic outcomes. On the aggregate level it has implications in form of tax revenues and on the individual level for example in the context of problem gambling. The second part of my thesis is composed of three papers that address risk taking in experimental settings with a focus on the social context. In these three papers I use economic experiments to examine individual risk preferences in the presence of social comparison, risk preferences of groups compared to individuals and the predictive power of risk and time preferences as well as mindfulness for adolescents’ field behavior. Studies three and four focus on decision making processes explicitly taking the social context into account and demonstrate that the social context has a significant influence on preferences. The fifth study examines the relation between preferences and personality traits and analyzes their influence on economic outcomes, including health and economic related behavior, such as smoking or saving, as well as subjective well-being.