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Socially embedded risky choice: Fairness, efficiency and social distance
By Prof. Paul Clist,
Development Economics University of East Anglia
Organized by
Institute for Public Policy, HKUST
Date : 6 April 2017 (Thursday)
Time : 11:00am – 12:30pm
Venue : 1504 (Lift 25 -26), Academic Building, HKUST
Abstract:
In many developing countries, risk-taking cannot be well understood in a social vacuum, but rather is socially embedded as investments inevitably lead to inequality. Some argue that an ex post view of inequality prevails, and so profitable investments are not chosen because of the resulting disutility of inequality. We run a risky choice game in Eastern Uganda which enables us to distinguish for each player whether they operate according to ex post inequality aversion (outcome fairness), efficiency seeking (where they derive positive utility from ex post inequality as it has a larger total payout) or ex ante (process) fairness views. We find while individuals are not consistent, people are. Furthermore, our results show that the common use of an idiosyncratic resolution to study these topics is problematic as it may be confounded by other factors and is less easily understood. More broadly, our results highlight that while risk and social preferences are two of the oldest domains of experimental economics, work to synthesise these two is relatively recent and incomplete.
About the speaker:
Dr Paul Clist completed his PhD in Economics from the University of Nottingham in 2010. His work on development aid has led to publications in top development journals (e.g. World Development, World Bank Research Observer) and policy work including presenting to the UK's House of Parliament's Select Committee on International Development. Since 2014 he has been an associate professor at the University of East Anglia. This coincides with the beginning of his experimental work on risk and social preferences, with a recent paper on the effect of language on social preferences recently submitted (R&R) to the Journal of Development Economics.
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