Risk-averse and risk-taking newsvendors: a conditional expected value approach

2007 ◽  
Vol 1 (1) ◽  
pp. 93-110 ◽  
Author(s):  
Werner Jammernegg ◽  
Peter Kischka
Keyword(s):  
Risk Taking ◽  
Expected Value ◽  
Risk Averse

scholarly journals Anti-social motives explain risk aversion for others in decisions from experience

2017 ◽  
Author(s):  
Sebastian Olschewski ◽  
Marius Dietsch ◽  
Elliot Andrew Ludvig
Keyword(s):  
Social Behavior ◽  
Risk Aversion ◽  
Risk Taking ◽  
Risk Preferences ◽  
Risk Preference ◽  
Expected Value ◽  
Risk Averse ◽  
Social Motives ◽  
Decisions From Experience ◽  
Risky Option

When deciding for others based on explicitly described odds and outcomes, people often havedifferent risk preferences for others than for themselves. In two pre-registered experiments, we examine risk preference for others where people learn about the odds and outcomes by experiencing them through sampling. In both experiments, on average, people were more risk averse for others than for themselves, but only when the risky option had a higher expected value. Furthermore, based on a separate set of choices, we classified people as pro- or anti- social. Only those people classified as anti-social were more risk averse for others, whereas those classified as prosocial chose similarly for themselves and others. When the uncertainty was removed, however, all participants exhibited less anti-social behavior. Together, these results suggest that anti-social motives contribute to the observed limited risk-taking for others and that outcome uncertainty facilitates the expression of these motives.

The Moderating Role of Personal Relevance on Differential Priming of Anxiety and Sadness on Perceived Travel Risk: A Replication

2009 ◽  
Vol 104 (2) ◽  
pp. 500-508 ◽  
Author(s):  
Wen-Bin Chiou ◽  
Ming-Hsu Chang ◽  
Chien-Lung Chen
Keyword(s):  
Decision Making ◽  
Risk Taking ◽  
Personal Relevance ◽  
Risk Averse ◽  
Mood Repair ◽  
Neutral Mood ◽  
Motivational Influences ◽  
Relevance Condition ◽  
Moderating Role

Raghunathan and Pham conducted a pioneer study in 1999 on the motivational influences of anxiety and sadness on decision making and indicated that anxiety would motivate individuals to be risk averse, whereas sadness would motivate individuals to be risk taking. A replication study was employed in the domain of perceived travel risk. Compared to participants in a neutral mood, anxious participants showed higher perceived travel risk than sad participants. Moreover, the differential effect of anxiety and sadness on perceived travel risk was only pronounced under the high personal relevance condition, in which participants made personal decisions and expected that they would be affected by the outcomes. In general, the results extend the notion proposed by Raghunathan and Pham suggesting that travelers' implicit goals primed by anxiety or sadness used for mood-repair purposes appear to be moderated by personal relevance.

Solo Sailing: An “Ordinary Girl”, Voluntary Risk-Taking and (Ir)Responsibility

2014 ◽  
Vol 31 (3) ◽  
pp. 267-286 ◽  
Author(s):  
Mike Brown ◽  
Dawn Penney
Keyword(s):  
Risk Taking ◽  
Focal Point ◽  
Western Society ◽  
Risk Averse ◽  
Perceptions Of Risk ◽  
And Gender ◽  
Public Reaction ◽  
Contemporary Western Society

This article draws on material associated with a solo sailing circumnavigation, undertaken by 16 year old Jessica Watson in 2009–2010, to discuss how her voyage provided a focal point for debates relating to voluntary risk-taking conducted within the sport and leisure context. Specifically, we illustrate how public and media commentaries on her voyage reflect discourses of risk being infused and conflated with discourses of responsibility, youth and gender. Our analysis brings to the fore the contested, moral and political nature of risk discourses in contemporary western society. Public reaction to Watson’s voyage indicates that descriptions of western society as risk-averse fail to capture the situated and dynamic perceptions of risk.

scholarly journals Modernizing Conceptions of Valuation and Cognitive-Control Deployment in Adolescent Risk Taking

2019 ◽  
Vol 29 (1) ◽  
pp. 102-109 ◽  
Author(s):  
Kathy T. Do ◽  
Paul B. Sharp ◽  
Eva H. Telzer
Keyword(s):  
Decision Making ◽  
Control System ◽  
Cognitive Control ◽  
Computational Model ◽  
Risk Taking ◽  
Expected Value ◽  
Risky Decision Making ◽  
Risky Decision ◽  
Adolescent Risk ◽  
Risk Taking Behavior

Heightened risk taking in adolescence has long been attributed to valuation systems overwhelming the deployment of cognitive control. However, this explanation of why adolescents engage in risk taking is insufficient given increasing evidence that risk-taking behavior can be strategic and involve elevated cognitive control. We argue that applying the expected-value-of-control computational model to adolescent risk taking can clarify under what conditions control is elevated or diminished during risky decision-making. Through this lens, we review research examining when adolescent risk taking might be due to—rather than a failure of—effective cognitive control and suggest compelling ways to test such hypotheses. This effort can resolve when risk taking arises from an immaturity of the control system itself, as opposed to arising from differences in what adolescents value relative to adults. It can also identify promising avenues for channeling cognitive control toward adaptive outcomes in adolescence.

scholarly journals Behavioural factors in the financial decisions of young Mozambicans

2015 ◽  
Vol 46 (4) ◽  
pp. 11-22 ◽  
Author(s):  
J. H. Mota ◽  
A. C. Moreira ◽  
A. J. Cossa
Keyword(s):  
Expected Utility ◽  
Risk Taking ◽  
Standard Theory ◽  
Risk Averse ◽  
Rational Thinking ◽  
Behavioural Finance ◽  
Financial Decisions ◽  
The Future ◽  
Behavioural Factors ◽  
Finance Theory

This paper seeks to analyse how behavioural factors influence the financial decisions of young Mozambican investors. The standard theory of finance assumes investors make rational financial decisions, seeking to minimise risk and maximise their expected utility. However, several studies have been conducted criticizing the assumption that investors are rational, opening the way to behavioural finance theory. According to the behavioural finance approach, financial decisions made by individuals are not based on rational thinking and their risk taking behaviour depends on their beliefs or feelings. Our analysis reveals that young Mozambicans are risk averse towards certain gains and risk lovers when faced with certain losses; they are excessively optimistic about the future; they use the information available as an anchor for their estimates; and they are so overconfident that they believe estimates in uncertain situations to be more accurate than they really are.

Microfinance Games

2010 ◽  
Vol 2 (3) ◽  
pp. 60-95 ◽  
Author(s):  
Xavier Giné ◽  
Pamela Jakiela ◽  
Dean Karlan ◽  
Jonathan Morduch
Keyword(s):  
Experimental Economics ◽  
Risk Taking ◽  
Free Riding ◽  
Risk Averse ◽  
Group Lending ◽  
Dynamic Incentives ◽  
Theoretical Predictions ◽  
Experimental Games

Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions, with dynamic incentives strongly reducing risk-taking even without group-based mechanisms. Group lending increases risk-taking, especially for risk-averse borrowers, but this is moderated when borrowers form their own groups. Group contracts benefit borrowers by creating implicit insurance against investment losses, but the costs are borne by other borrowers, especially the most risk averse. (JEL D82, G21, G31, O16)

scholarly journals Risk Taking and Start-up Capital: Exploring Gender differences in Uganda, through an International Comparison

2011 ◽  
Vol 3 (2) ◽  
pp. 83-93 ◽  
Author(s):  
Laura Orobia ◽  
Gerrit Rooks .
Keyword(s):  
Gender Differences ◽  
Empirical Research ◽  
Gender Gap ◽  
Risk Taking ◽  
Data Sets ◽  
Risk Averse ◽  
Chi Square ◽  
Policy Makers ◽  
Start Up ◽  
Start Ups

This study sought to explain the gender differences with respect to risk taking behaviour and startup capital in Uganda, comparing with other countries. The start-up capital of businesses run by females is ostensibly smaller than those run by males in Uganda and in any other country. A number of reasons have been forwarded to explain this variance. Some researchers have linked the size of start-up capital to the risk taking behaviour among other factors. However there is insufficient local or Ugandan empirical research into this difference, given that much of the empirical research are based on western data sets. Data for this study was from the Global Entrepreneurship Monitor (GEM) 2003. A causal research design was used to establish the relationship between risk taking attitude and start up capital. A comparative design was also employed to compare the findings of Uganda with other GEM countries, Chi-square tests, and a two way analysis of variances were used to analyse the data. There are gender differences with respect to risk taking behaviour across all countries under study. However, the gender gap is wider in other countries than Uganda. On the whole, Uganda women are less risk averse as compared to those in other countries. The start-up capital requirement of Ugandan men is more than their female counterparts. In addition, Ugandan men invested more personal start up capital when they are risk averse. Among other recommendations, policy makers should sensitise females about viability of business start ups and encourage women access to ownership of property.

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