The Effect of Relation When Taking Risk on Behalf of Others - An Experimental Study

Abstract

Existing research within the field of taking risk on behalf of others have mainly focused on differences between the risk level individuals choose for themselves, relative to the risk level taken on behalf of others. In this experiment I take this research a bit further, by not only looking at this difference, but also the difference between the risk level taken on behalf of people that the participants do not know and people they are in close relation to. The results show no significant difference when adding relation as a variable. However, I do believe there is an effect, but that the results here was caused by limitations to the experiment. Further, there is evidence of individuals behaving with more risk aversion when taking risk on behalf of others, relative to themselves and we see that their betting behavior is affected by their belief of what other participants do.