Risk and relative social rank: positional concerns and risky shifts in probabilistic decision-making

Abstract 

Although research indicates that individuals generally favor certain prospects over those whose outcomes are more variable, risk-aversion does not characterize human decision-making across domains. Here, we use an evolutionary perspective to explore the role that concerns with relative position play on preferences for certain versus probabilistic outcomes. Our evolutionary-based hypothesis predicts that concern with relative position will lead to increased risk when (1) the higher variance outcome offers the potential to render one better off than social competitors, but the lower variance outcome would not, (2) the choice is in a decision domain affecting one's ability to solve adaptive problems reliably present in human social life, and (3) the decision is being made about a gain rather than a loss. The current study (N=239) found support for these predictions, demonstrating that such positional concerns reverse the well-documented certainty effect in domains predicted in advance by the theory. Our findings highlight the important role played by social comparisons in individual decision-making and preferences for risk.

Keywords: Social comparisons, Social judgment, Evolutionary psychology, Risk assessment, Certainty effect