Girl Power in Groups: Investigating Gender Effects in Risky Decision Making

Abstract: Most important decisions in society are made by groups of individuals, not individuals in isolation. In this thesis we conduct a lab experiment using the investment decision introduced by Gneezy & Potters (1997) with the aim of studying how individual risk preferences translate to a group setting. More specifically, we are interested in the role of gender in this process. First, we find that females take less risk than males in their investment decision, as is shown in previous studies. Second, we find no evidence for a change in risk attitudes when individuals are asked to make the same investment decision for a small group including themselves. Third, when groups are asked to make this investment decision together we find that those with a larger share of females take less risk, and that this difference is captured by individual risk preferences. Fourth, we observe a tendency for groups to take more risk than individuals. Finally, we find a peer effect in preferences after interacting with a group. These findings together contribute to a better understanding of gender effects in groups who face risky decisions.