Risk Taking with Social Consequences

Do anticipated social consequences influence risky choices? Do people take more, less or the same risk when inequality results from risky choice? We provide experimental evidence. Subjects choose lotteries for themselves and a partner under different risk resolutions, allowing us to identify their type. We find anticipated social consequences influence risk taking for most people, as only one-fifth focus on ex-ante equality. Two-fifths are efficiency-seeking, taking more risk when inequality is guaranteed. This possibility is not considered by previous experimental work, but is the largest category for our sample. Only one-third are ex-post inequality averse, reducing inequality of outcomes at a cost to their expected earnings. We show types are robust, and also document large gender-based heterogeneity