Preference adaptation to risk exposure

Marc Willinger is professor of economics at the University of Montpellier (UM) and member of the Center for Environmental Economics of Montpellier (CEE-M). His main research area is experimental and behavioral economics. His research relies mainly on laboratory and field experiments to study risk taking and social preferences in the context of social dilemmas and asymmetric information. His current research interests are on local adaptation to a risky environment and on trading behavior in experimental asset markets, with a focus on socially responsible investments.

People who have been living for a long time in areas where they are threaten by natural hazards are likely to have adapted in various ways to their hazardous environment. I investigate whether risk preferences (and other preferences) of individuals exposed to a background risk differ with respect to the preferences of individuals that are not exposed to such risk. For that purpose, I conducted field experiments in several places around the world (Arequipa in Perú, Yogyakarta in Indonesia and Saint-Louis in Sénégal) that are exposed to natural hazards. Findings about preference adaptation are discussed and put into perspective with respect to economic theory and policy design.