Is the Veil of Ignorance Only a Concept About Risk in Loss Contexts?

It is important to distinguish between an individual’s risk preference in fluctuations in their payoffs and social preference for considering others’ payoffs behind the veil of ignorance (VoI). In this study, we adapted Schildberg-Hörisch’s (2010) experimental design by applying it to the loss domain in order to distinguish two preferences. Our main results can be summarized as threefold. First, on average, there is a significant difference between risk preference and social preference. Second, social preference leads to more equal choices than risk preference; that is, social preference is more averse to fluctuations in the outcomes than risk preference. Third, risk preference and social preference differed even in men although the previous study have not been able to identify this. Our results indicate that the VoI may work even in a loss domain