Taking Risk with Other People’s Money: Does Information about the Others Matter?

This paper experimentally investigates how people take risk with other people’s money, and specifically, whether risk-taking is influenced by information about others. Before choosing the degree of risk another person must bear, subjects get information about the other person’s gender and self-reported level of extroversion. There is no evidence that information about gender has an effect, and matters more for choosing on behalf of one’s-self than for choosing on behalf of others. Extroversion, however, has a significant effect. Here it matters more for choosing on behalf of others than on behalf of one’s-self. I also find that the own risk choices have a strong effect on choosing on behalf of others.