Risk preferences in surrogate financial decision making

This research examined the effect of information asymmetries on risk preferences in surrogate financial decision making. Beneficiaries of decisions made by real-life financial surrogates rarely have as much information about the decision options as the surrogates making the choice. In two studies from the point of view of the surrogate we found that such information asymmetries lead surrogates to make less risky choices for a beneficiary than they would for themselves. An additional study from the perspective of the beneficiary provided support for the hypothesis that beneficiaries weigh outcome information differently under different information conditions, and suggested surrogates may be choosing less risky options than beneficiaries would prefer in an attempt to shield themselves from negative evaluation by the beneficiaries.