Individual decisions to take risk often generate externalities for others. However, only few studies have assessed the interaction between externalities and risk attitudes. In this paper we extend previous literature by systematically investigating the role that positive externalities play in risk taking decisions. Specifically, we use an incentivised study conducted in three countries to examine whether willingness to help others can moderate subjects’ risk aversion. Moreover, we investigate the interrelation between individuals’ risk attitudes and social preferences in the context of vaccines uptake.
We set up an experiment where participants are asked to choose between a certain payment and a gamble. The gamble has both positive and negative outcomes and each subject’s decision to take risk generates a positive payoff for a passive player.
Our results show that subjects are more willing to take risks, despite the potential loss for themselves, when their risk-taking benefits others.
We also find that framing the risk-taking task as a vaccination decision significantly increases participants’ willingness to take risks compared to the unframed treatment, suggesting the existence of a strong social norm. However, the effect of the vaccine frame appears to be stronger among those already vaccinated, indicating that there are limits to the potential use of this norm to increase vaccination rates.