https://macropaperwarehouse.com/authors/alexander-w.-cappelen/Alexander W. CappelenHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/linking-social-and-personal-preferences-theory-and-experiment/https://macropaperwarehouse.com/papers/linking-social-and-personal-preferences-theory-and-experiment/<p>This paper asks whether an individual&rsquo;s attitude toward risk in the personal domain (choices affecting only oneself) can be linked to that same individual&rsquo;s attitude toward risk in the social domain (choices affecting both oneself and others). The authors provide a theoretical answer in the form of necessary and sufficient conditions, and then test those conditions experimentally.</p> <p>The formal model posits a decision maker (DM) with a preference relation over lotteries on a set of social states, where a distinguished subset of states are personal (consequences for the DM alone). The authors assume preferences satisfy Completeness, Transitivity, Continuity, and State Monotonicity — the last being equivalent to respect for First-Order Stochastic Dominance (FOSD), a condition weaker than the Expected Utility Independence Axiom and satisfied by virtually all extant decision theories including Weighted Expected Utility, Rank-Dependent Utility, and Prospect Theory. The key theoretical result (Theorem 1) establishes that the full preference relation over all social lotteries can be uniquely deduced from the partial observations of (i) riskless social choices and (ii) risky personal choices if and only if the DM finds every social state indifferent to some personal state. When this condition fails, there exist social lotteries whose ranking cannot be recovered from the partial data.</p>