Do Positive Externalities Encourage Risk Taking? Experimental Evidence on Gender and Group Membership

Many positive externalities are created by individual risk-taking. We investigate whether risk-taking increases in the presence of positive externalities. In our experiments, we study choices between investments in technologies that differ according to their level of risk and the extent to which they generate positive externalities for others. We find that even large positive externalities have little to no impact on individual risk-taking and risk-taking in groups. We also find that women are generally less willing to take risks than men and that there are no gender differences in response to positive externalities. These findings provide new insights on the limited malleability of risk-taking in environments in which it is in the best interest of society to take more risks