We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare consultation to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmark treatments replicate findings that groups take more risk than individuals in the investment task; content analysis of group discussions reveals that higher risk-taking in groups is positively correlated with mentions of expected value. In our consultation treatments, we find evidence of peer effects: decisions within the peer group are significantly correlated. However, average risk-taking after consultation is not significantly different from isolated individual choices. We also find that risk-taking after consultation is not affected by adding a feedback stage in which subjects see the choices of their consultation peers. © 2013 The Authors.
Bougheas, S., Nieboer, J., & Sefton, M. (2013). Risk-taking in social settings: Group and peer effects. Journal of Economic Behavior and Organization, 92, 273–283. https://doi.org/10.1016/j.jebo.2013.06.010