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Do the Wealthy Risk More Money? An Experimental Comparison

  • Antoni Bosch-Domènech
  • Joaquim Silvestre
Chapter
Part of the Studies in Economic Theory book series (ECON.THEORY, volume 25)

Summary

Are poor people more or less likely to take money risks than wealthy folks? We find that risk attraction is more prevalent among the wealthy when the amounts of money at risk are small (not surprising, since ten dollars is a smaller amount for a wealthy person than for a poor one), but, interestingly, for the larger amounts of money at risk the fraction of the nonwealthy displaying risk attraction actually exceeds that of the wealthy. We also replicate our previous finding that many people display risk attraction for small money amounts, but risk aversion for large ones.

Key words

Risk attraction Risk aversion Wealth Experiments 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2006

Authors and Affiliations

  • Antoni Bosch-Domènech
    • 1
  • Joaquim Silvestre
    • 2
  1. 1.Department of Economics and BusinessUniversitat Pompeu FabraBarcelonaSpain
  2. 2.Department of EconomicsUniversity of CaliforniaDavisUSA

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