Working Paper

Peer Effects and Risk-taking among Entrepreneurs: Lab-in-the-Field Evidence

We study how social interactions influence entrepreneurs’ attitudes toward risk. We
conduct two risk-taking experiments with young Ugandan entrepreneurs. Between the
two experiments, the entrepreneurs participate in a networking activity where they
build relationships and discuss with each other. We collect data on peer network
formation and on participants’ choices before and after the networking activity. We
find that participants tend to become more (less) risk averse in the second experiment if
the peers they discuss with are on average more (less) risk averse in the first experiment.
This suggests that even short term social interactions may affect risk preferences.