Inequality and risk-taking behaviour

Research output: Contribution to journalArticlepeer-review

Abstract

This paper investigates social influences on attitudes to risk and reanalyses how risk taking varies with relative position and inequality. Individuals with low initial wealth, about to participate in a tournament with richer opponents, may take fair gambles even though they are risk averse in both consumption and tournament rewards. It is shown that this risk taking decreases in the inequality of initial endowments, but in contrast it increases in the inequality of tournament rewards.
Original languageEnglish
Pages (from-to)316-328
JournalGames and Economic Behavior
Volume107
Early online date2 Dec 2017
DOIs
Publication statusPublished - Jan 2018

Keywords

  • risk preferences
  • relative concerns
  • tournaments
  • inequality

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