Observing Others’ Behavior & Risk Taking In Decisions From Experience
What happens to risk taking when observing other’s behavior?
Abstract (via SJDM)
This paper examines how observing other people’s behavior affects risk taking in repeated decision tasks. In Study 1, 100 participants performed experience-based decision tasks either alone or in pairs, with the two members being exposed to each others’ choices and outcomes. The tasks involved either equiprobable gains and losses or frequent small gains and rare large losses. The results indicated that, in both risk types, the social exposure increased the proportion of risky selection, but its effect was stronger in the rare-loss condition. In Study 2 the rare-loss task was administered to 32 study participants, with a target individual observing the choices of a paired individual. The results showed that observing others, rather than being observed, led to the pattern of increased risk taking. The findings of the two studies indicate the importance of distinguishing different types of risky situations and shed light on contradictory findings in the literature.
Excerpts (Via SJDM)
The effect of the social environment on individual decision making is important because many naturally occurring individual behaviors are conducted in the presence of others. This area of investigation is often studied in the field of social learning (see e.g., Casey & Rozin, 1989; Galef, 1995; 1996; Laland, 1996; Reebs, 2000) which is focused on situations in which individuals have the opportunity to learn from others’ experience.
Another field of study relevant to the current context is the study of group behavior, in which groups are typically asked to reach a consensus. Studies of group behavior have addressed the question of social influence on risk taking. The main finding in this line of research is that groups tend to hold more extreme risk attitudes than those of their individual members.