Risk Taking in Decision Making for Others Versus the Self¹

Abstract

In two studies, we examined people's level of risk taking when making monetary decisions for other people rather than for themselves. Experiment 1 examined the role of regret in these situations; results show that regret concerns led to increased risk avoidance both when participants made decisions for other people as well as when making decisions for themselves. Experiment 2 tested whether skill tasks would lead to greater risk avoidance when the decision was for another person versus for oneself. This hypothesis was not supported, although men were more risk seeking than were women in both situations. Taken together, these studies suggest that many of the findings from risk research on individual decision making regarding financial situations generalize to decision making for others.