Who Bears the Burden? Risk Acceptance and Allocation in Social Groups

Abstract

How do people choose who should be responsible for handling risk in a common project or in a social context? Do persons allocate their own risk to others and how does it affect the person’s risk perception? To what extent will personal characteristics define individuals in terms of perceived risk as well as determine who will be risk responsible and who will be risk allocating? These questions are investigated in a multinomial regression model using questionnaire data. The results show a difference between risk perception of individuals and the likelihood of being risk responsible and risk allocation. The results also show evidence for risk responsibility and risk allocation based on personal characteristics of individuals, as well as indications of moral hazard of risk allocators and heightened risk perception of risk responsible individuals.