Increased social distance makes people more risk-neutral.
Individuals are consistently observed to be risk-averse over gains and risk-seeking over losses. This study examined whether increased social distance would change these behavioral patterns. To test our hypothesis, social distance was manipulated by asking the participants to make decisions either for themselves or for another person (Experiment 1), either for a known person or for an unknown person (Experiment 2), and either for a close friend or for a distant friend (Experiment 3). The results of Experiments 1 and 3 showed that increased social distance made people more risk-neutral, and such an effect was stronger in the gain domain than in the loss domain. However, the effect of social distance was not observed in Experiment 2. These findings suggest that risk preferences are influenced by the social distance between decision makers and beneficiaries.
a East China Normal University.
Qingzhou
Q
Sun
a East China Normal University.
Yongfang
Y
Liu
b New York University - Abu Dhabi.
Huanren
H
Zhang
a East China Normal University.
Jingyi
J
Lu
D000328:Adult; D003657:Decision Making; D005260:Female; D006801:Humans; D008297:Male; D012929:Psychological Distance; D012309:Risk-Taking; D055815:Young Adult
Gain/loss domain; risk preference; social distance