Do unto others: A theory and experimental test of interpersonal preference factors in decision making under uncertainty

Abstract We investigate how interpersonal preferences influence decision making under uncertainty. Classical models assume agents maximize expected utility based solely on their own payoffs, yet experimental evidence often shows apparent instability in risk preferences across institutions. We propose and test a utility framework that incorporates altruism, malice, fairness, and competitiveness alongside risk attitudes. Using five choice tasks that hold own-payoff risk constant while varying effects on another participant’s payoffs, we isolate interpersonal factors from the institutional setting and strategic uncertainty. Results show that while average choices align with risk-neutral predictions, individual choices exhibit three systematic patterns: subjects tend to be altruistic and fairness-seeking, malicious and distinction-seeking, or neutral on both dimensions. These findings explain apparent shifts in risk preferences across institutions even when underlying preferences are stable. This highlights the importance of interpersonal considerations in models of choice under uncertainty.