scholarly journals Optimal risk taking in an uneven tournament game with risk averse players

2008 ◽  
Vol 44 (11) ◽  
pp. 1219-1231 ◽  
Author(s):  
Matthias Kräkel
Keyword(s):  
Risk Taking ◽  
Risk Averse

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 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.

scholarly journals Stress Makes the Difference: Social Stress and Social Anxiety in Decision-Making Under Uncertainty

2021 ◽  
Vol 12 ◽  
Author(s):  
Kristina M. Hengen ◽  
Georg W. Alpers
Keyword(s):  
Decision Making ◽  
Social Anxiety ◽  
Risk Taking ◽  
Social Stress ◽  
Response Times ◽  
Decisional Conflict ◽  
Risk Averse ◽  
Socially Anxious ◽  
Anxious Group ◽  
Angry Face

Stress and anxiety can both influence risk-taking in decision-making. While stress typically increases risk-taking, anxiety often leads to risk-averse choices. Few studies have examined both stress and anxiety in a single paradigm to assess risk-averse choices. We therefore set out to examine emotional decision-making under stress in socially anxious participants. In our study, individuals (N = 87) high or low in social anxiety completed an expanded variation of the Balloon Analogue Risk Task (BART). While inflating a balloon to a larger degree is rewarded, a possible explosion leads to (a) a loss of money and (b) it is followed by an emotional picture (i.e., a calm vs. an angry face). To induce stress before this task, participants were told that they would have to deliver a speech. We operationalized risk-taking by the number of pumps during inflation and its functionality by the amount of monetary gain. In addition, response times were recorded as an index of decisional conflict. Without the stressor, high socially anxious compared to low socially anxious participants did not differ in any of the dependent variables. However, under stress, the low socially anxious group took more risk and earned more money, while high socially anxious individuals remained more cautious and did not change their risk-taking under social stress. Overall, high socially anxious individuals made their decisions more hesitantly compared to low socially anxious individuals. Unexpectedly, there were no main effects or interactions with the valence of the emotional faces. This data shows that stress affects socially anxious individuals differently: in low socially anxious individuals stress fosters risk-taking, whereas high socially anxious individuals did not alter their behavior and remained risk-averse. The novel eBART is a promising research tool to examine the specific factors that influence decision-making.

scholarly journals Optimal contracts with a risk‐taking agent

2020 ◽  
Vol 15 (2) ◽  
pp. 715-761 ◽  
Author(s):  
Daniel Barron ◽  
George Georgiadis ◽  
Jeroen Swinkels
Keyword(s):  
Risk Taking ◽  
Limited Liability ◽  
Risk Averse ◽  
Trade Off ◽  
Optimal Contracts ◽  
Risk Neutral ◽  
Profit Maximizing ◽  
Over Time

Consider an agent who can costlessly add mean‐preserving noise to his output. To deter such risk‐taking, the principal optimally offers a contract that makes the agent's utility concave in output. If the agent is risk‐neutral and protected by limited liability, this concavity constraint binds and so linear contracts maximize profit. If the agent is risk averse, the concavity constraint might bind for some outputs but not others. We characterize the unique profit‐maximizing contract and show how deterring risk‐taking affects the insurance‐incentive trade‐off. Our logic extends to costly risk‐taking and to dynamic settings where the agent can shift output over time.

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 Job loss and health threatening events modulate risk-taking behaviours in the Covid-19 emergency

2020 ◽  
Vol 10 (1) ◽  
Author(s):  
Caterina Galandra ◽  
Chiara Cerami ◽  
Gaia Chiara Santi ◽  
Alessandra Dodich ◽  
Stefano F. Cappa ◽  
...  
Keyword(s):  
Risk Taking ◽  
Healthcare Workers ◽  
World Economy ◽  
Ad Hoc ◽  
Negative Impact ◽  
Stressful Events ◽  
Risk Averse ◽  
Related Risk ◽  
Life Threatening ◽  
Person Experience

AbstractCovid-19 pandemic is exerting a tragic impact all around the world. First-person experience of life-threatening and stressful events can modify individuals’ risk perception, and, consequently, risk-taking behaviours. Here we investigated risk-taking profiles in 130 Italian residents, and compared healthcare to non-healthcare workers, during the lockdown phase. We ad hoc developed the “Covid-19 Risk Task”, including the classic monetary Holt-Laury Paired Lottery Task (Monetary Condition, MC) and two new ecological conditions exploring Covid-19 related risk-taking aptitudes in relation to different health (Health Status Condition, HsC) and employment (Employment Status Condition, EsC) outcomes. Results showed that, in the whole sample, individuals were more risk-averse in MC than in HsC and EsC. Moreover, a payoff increase produced a shift toward more risk-averse behaviours in MC, but not in HsC and EsC, where we found an opposite trend suggesting a more risk-loving behaviour. Finally, we found that healthcare workers were significantly less risk-averse compared to non-healthcare workers in EsC, but not in MC and HsC. These findings provided evidence of the possible effects of Covid-19 outbreak on risk-taking aptitudes. The negative impact on human choices and, consequently, on the whole world economy of this catastrophic life event must not be underestimated.

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