Risk attitudes in a social environment

This dissertation studies by means of economic experiments the effect of the social environment on the risk behaviour of individuals in risky situations, such as pandemia outbreaks, receiving or not receiving a donor liver, terrorism threat, but also for example participating in a lottery. The social environment in itself appears not to have a great influence on the risk behaviour of an individual. However, it this person fulfils the role of social planner and has to decide how risks will be dispersed over the social environment (for example determining who is entitled to a donor liver, or who is or isn’t admitted to a medical study programme), he has a strong preference for procedures that apply to everyone and where fate determines the allocation. But as soon as the level of the risk is determined by a social environment they can choose themselves, people will sooner make risky, but efficient choices that ultimately decrease the risk. An example of this is the proposition by Chancellor Angela Merkel to place countries with an unhealthy national financial system out of the European Union. The threat of exclusion will force the EU countries to better watch over their financial system, which lowers the risk of another Euro crisis.