Room composition effects on risk taking by gender
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Room composition effects on risk taking by gender Marco Castillo1,2 · Greg Leo3 · Ragan Petrie1,2 Received: 10 August 2015 / Revised: 20 October 2019 / Accepted: 14 November 2019 © Economic Science Association 2019
Abstract We present evidence of a direct social context effect on decision-making under uncertainty: the gender composition of those in the room when making individual risky decisions significantly alters choices even when the actions or presence of others are not payoff relevant. In our environment, decision makers do not know the choices made by others, nor can they be inferred from the experiment. We find that women become more risk taking as the proportion of men in the room increases, but the behavior of men is unaffected by who is present. We discuss some potential mechanisms for this result and conjecture it is driven by women being aware of the social context and imitating the expected behavior of others. Our results imply that the environment in which individual decisions are made can change expressed preferences and that aggregate behavior may be context dependent. Keywords Gender · Decision context effects · Risk aversion · Experiment JEL Classification C91 · D81 · J16
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1068 3-019-09635-w) contains supplementary material, which is available to authorized users. * Ragan Petrie [email protected] Marco Castillo [email protected] Greg Leo [email protected] 1
Department of Economics, Texas A&M University, College Station, USA
2
The Melbourne Institute, Melbourne, Australia
3
Department of Economics, Vanderbilt University, Nashville, USA
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1 Introduction Our decisions and behavior can be strongly influenced by who is in our presence. Choices and actions may be different in groups of the same gender than in those of mixed gender. But, can we be influenced by the group gender composition, even if others have no bearing on our choices either now or in the past, and decisions are made in absolute privacy? Understanding whether such effects exist is important because they imply that the mere presence of certain others can affect the choices of individuals. The existence of these effects means that the gender composition of teams or even the design of the built environment, which dictates who one is surrounded by, could impact behavior. Despite its relevance to understanding decision making, there is no direct evidence showing that who is in the room affects behavior, absent strategic interaction, information transfer, or payoff relevance of others’ decisions. We address this by randomly varying the gender composition of the group present when decisions are made in an economic experiment. Importantly, the presence and behavior of those individuals provide no information and are not strategically or payoff relevant. The results are striking. We find that the gender composition of the room alters individual behavior. Women are more risk taking as th
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