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date: 19 April 2024

The Behavioral Consequences of Conflict Exposure on Risk Preferenceslocked

The Behavioral Consequences of Conflict Exposure on Risk Preferenceslocked

  • Enrique Fatas, Enrique FatasEscuela de Administración, Universidad ICESI and Center for Social Norms and Behavioral Dynamics, University of Pennsylvania
  • Nathaly Jiménez, Nathaly JiménezFacultad de Ciencias Sociales y Económicas, Universidad del Valle
  • Lina Restrepo-PlazaLina Restrepo-PlazaFacultad de Ciencias Sociales y Económicas, Universidad del Valle
  •  and Gustavo RincónGustavo RincónServicio Nacional de Aprendizaje, SENA

Summary

Violent conflict is a polyhedric phenomenon. Beyond the destruction of physical and human capital and the economic, political, and social costs war generates, there is an additional burden carried by victims: persistent changes in the way they make decisions. Exposure to violence generates changes in how individuals perceive other individuals from their group and other groups, how they discount the future, and how they assess and tolerate risk. The behavioral consequences of violence exposure can be documented using experiments in which participants make decisions in a controlled, incentive-compatible scenario. The external validity of experiments is reinforced when the studies are run in postconflict scenarios, for example, in Colombia, with real victims of conflict. The experimental tasks, therefore, may map risk attitudes among victims and nonvictims of the conflict who share a common background, and distinguish between different types of exposure (direct versus indirect) and different sources of violence (conflict-related versus criminal violence). The experimental evidence collected in Colombia is consistent with a long-lasting and substantial effect of conflict exposure on risk attitudes. Victims are more likely to take risks and less likely to make safe choices than nonvictims, controlling for demographic, socioeconomic, and attitudinal factors. The effect is significant only when the source of violence is conflict (exerted by guerrilla or paramilitary militias) and when violence is experienced directly by individuals. Indirect conflict exposure (suffered by close relatives) and criminal violence leave no significant mark on participants’ risk attitudes in the study.

Subjects

  • Economic Development
  • Micro, Behavioral, and Neuro-Economics

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