scholarly journals Risk attitudes in a changing environment: An evolutionary model of the fourfold pattern of risk preferences.

2015 ◽  
Vol 122 (2) ◽  
pp. 364-375 ◽  
Author(s):  
Dave E. W. Mallpress ◽  
Tim W. Fawcett ◽  
Alasdair I. Houston ◽  
John M. McNamara
Keyword(s):  
Risk Preferences ◽  
Evolutionary Model ◽  
Risk Attitudes ◽  
Changing Environment ◽  
Fourfold Pattern

scholarly journals Improved Rice Technology Adoption: The Role of Spatially-Dependent Risk Preference

Agriculture ◽  
2021 ◽  
Vol 11 (8) ◽  
pp. 691
Author(s):  
Omotuyole Isiaka Ambali ◽  
Francisco Jose Areal ◽  
Nikolaos Georgantzis
Keyword(s):  
Field Experiments ◽  
Climatic Factors ◽  
Risk Preferences ◽  
Risk Preference ◽  
Probit Model ◽  
Climatic Conditions ◽  
High Yield ◽  
Risk Attitudes ◽  
Policy Action ◽  
Rice Varieties

This study analyses farmers’ adoption of improved rice technology, taking into account farmers’ risk preferences; the unobserved spatial heterogeneity associated with farmers’ risk preferences; farmers’ household and farm characteristics; farm locations, farmers’ access to information, and their perceptions on the rice improved varieties (i.e., high yield varieties, HYV). The study used data obtained from field experiments and a survey conducted in 2016 in Nigeria. An instrumental-variable probit model was estimated to account for potential endogenous farmers’ risk preference in the adoption decision model. Results show that risk averse (risk avoidant) farmers are less likely to adopt HYV, with the spatial lags of farmers’ risk attitudes found to be a good instrument for spatially unobserved variables (e.g., environmental and climatic factors). We conclude that studies supporting policy action aiming at the diffusion of improved rice varieties need to collect information, if possible, on farmers’ risk attitudes, local environmental and climatic conditions (e.g., climatic, topographic, soil quality, pest incidence) in order to ease the design and evaluation of policy actions on the adoption of improved agricultural technology.

scholarly journals The Fourfold Pattern of Risk Attitudes in Choice and Pricing Tasks

2009 ◽  
Vol 120 (545) ◽  
pp. 595-611 ◽  
Author(s):  
William T Harbaugh ◽  
Kate Krause ◽  
Lise Vesterlund
Keyword(s):  
Risk Attitudes ◽  
Fourfold Pattern

Assessing risk attitudes and time preferences on the rural–urban interface of Bengaluru, India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Johannes Wegmann ◽  
Daniel Hermann ◽  
Oliver Musshoff
Keyword(s):  
Rural Areas ◽  
Urban Areas ◽  
Risk Preferences ◽  
Time Preferences ◽  
Risk Attitudes ◽  
Indian Government ◽  
Content Type ◽  
Rural And Urban Areas ◽  
Rural And Urban ◽  
Agricultural Households

PurposeUrbanization is a main driver of the transformation from agricultural-based economies to service-based economies. At the same time, urbanization might also alter preferences and attitudes such as risk and time preferences that contribute to economic growth and foster this transition. To study the effect of urbanization, few studies have compared individual time or risk preferences in rural and urban settings, reporting mixed results. This study analyses how risk and time preferences alter along the rural–urban interface and assesses the correlation of socio-economic, socio-cultural and demographic characteristics with these preferences. Using such an approach provides insights how preferences are altered in areas of transition as the rural–urban interface mirrors different stages of urbanization.Design/methodology/approachUsing experimental approaches, risk attitudes and time preferences of 1,117 agricultural and non-agricultural households were elicited along the rural–urban interface of the fast-developing Indian megacity Bengaluru in 2016/17. The study reports joint estimations of risk and time preferences and discusses the influence of urbanization on these preferences.FindingsResults show that households are on average slightly risk-averse and highly impatient. The results also indicate a decline in discount rates towards rural areas while risk preferences do not considerably differ between those areas. This puzzling result may be explained by difference response of rural and urban areas to the Demonetization policy of the Indian government in 2016.Originality/valueThe research design compares jointly estimated risk and time preferences of agricultural and non-agricultural households of a rapidly urbanizing area in a low-medium income country.

Risk Pooling, Risk Preferences, and Social Networks

2012 ◽  
Vol 4 (2) ◽  
pp. 134-167 ◽  
Author(s):  
Orazio Attanasio ◽  
Abigail Barr ◽  
Juan Camilo Cardenas ◽  
Garance Genicot ◽  
Costas Meghir
Keyword(s):  
Social Networks ◽  
Risk Preferences ◽  
Risk Attitudes ◽  
Risk Pooling ◽  
Using Data

Using data from an experiment conducted in 70 Colombian communities, we investigate who pools risk with whom when trust is crucial for enforcing risk pooling arrangements. We explore the roles played by risk attitudes and social networks. Both empirically and theoretically, we find that close friends and relatives group assortatively on risk attitudes and are more likely to join the same risk pooling group, while unfamiliar participants group less and rarely assort. These findings indicate that where there are advantages to grouping assortatively on risk attitudes those advantages may be inaccessible when trust is absent or low. (JEL C93, O12, O18, Z13)

scholarly journals The risk elicitation puzzle revisited: Across-methods (in)consistency?

2020 ◽  
Author(s):  
Felix Holzmeister ◽  
Matthias Stefan
Keyword(s):  
Social Sciences ◽  
Experimental Design ◽  
Risk Preferences ◽  
Risk Preference ◽  
Preference Elicitation ◽  
Risk Attitudes ◽  
Aggregate Level ◽  
The Social ◽  
The Common ◽  
Simulation Exercises

Abstract With the rise of experimental research in the social sciences, numerous methods to elicit and classify people’s risk attitudes in the laboratory have evolved. However, evidence suggests that attitudes towards risk may vary considerably when measured with different methods. Based on a within-subject experimental design using four widespread risk preference elicitation tasks, we find that the different methods indeed give rise to considerably varying estimates of individual and aggregate level risk preferences. Conducting simulation exercises to obtain benchmarks for subjects’ behavior, we find that the observed heterogeneity in risk preference estimates across methods is qualitatively similar to the heterogeneity arising from independent random draws from the choice distributions observed in the experiment. Our study, however, provides evidence that subjects are surprisingly well aware of the variation in the riskiness of their choices. We argue that this calls into question the common interpretation of variation in revealed risk preferences as being inconsistent.

scholarly journals Relations between risk attitudes, culture and the endowment effect

2018 ◽  
Vol 10 (4) ◽  
pp. 7-20 ◽  
Author(s):  
Anita Kolnhofer Derecskei
Keyword(s):  
Decision Making ◽  
Conceptual Model ◽  
Risk Taking ◽  
Risk Perceptions ◽  
Risk Preferences ◽  
Cultural Influences ◽  
Risk Attitudes ◽  
Cultural Backgrounds ◽  
Social Risks ◽  
The Impact

Abstract The main purpose of this research was to examine whether systematic cross-national differences existed in risk preferences. As a part of the survey, it was also tested how the subjects decided on behalf of their friends. Considering the type of risk-taking and the role of endowment plus relevant cultural backgrounds, the answerers were grouped, and each segment could be identified. Finally, this segmentation could be correlated with behaviour in risk decisions. Here, the Allais situation was used testing respondent behaviour in risky decision-making on behalf of others. This paper used the validated DOSPERT Scale, measuring risk perceptions and risk preferences of international students (n=244). The used survey contained different risk attitudes depending on decision making and involved the following criteria: Ethical, Financial, Health or Safety, Recreational, and Social Risks. Applying the DOSPERT Scale, differences were also found between ‘Risk-Taking’, ‘Risk-Perceptions’, and ‘Expected Benefits’. This result can be explained by different risk attitudes particular to people making decisions involving measured risks. At the same time, thanks to the worldwide sample, this paper focused on cultural differences and observed the impact of different cultural backgrounds on risk-taking. Comparing personal traits with Hofstede’s cultural UAI (Uncertainty Avoidance Index) helped us understand deeper cultural influences. The sample was widely heterogeneous, which led to some changes in the original research question and provided a new method in the conceptual model. Based on the state of the art, a conceptual model was deduced, three hypotheses were tested, and three various segments were identified regarding the personal DOSPERT (Domain-Specific Risk-Taking Scale) Risk Preferences. In the second part of the paper, Personal Risk Preferences were connected and tested not only using the national culture background but also attitudes towards the endowment. Although there was no significant correlation between the distribution of risk perception, the styles of each role might show how the cultural heritage impacts various decisions and risk levels.

scholarly journals Cumulative lifetime stress exposure assessed by the STRAIN predicts economic ambiguity aversion

2021 ◽  
Author(s):  
Candace Raio ◽  
Benjamin Lu ◽  
Michael A. Grubb ◽  
Grant S Shields ◽  
George M. Slavich ◽  
...  
Keyword(s):  
Decision Making ◽  
Individual Differences ◽  
Early Life ◽  
Ambiguity Aversion ◽  
Risk Preferences ◽  
Risk Attitudes ◽  
Economic Approach ◽  
Prior Work ◽  
Stress Exposure ◽  
Factors Associated

Uncertainty is inherent in most decisions humans make. Economists distinguish between twotypes of decision-making under non-certain conditions: those involving risk (i.e., knownoutcome probabilities) and those that involve ambiguity (i.e., unknown outcome probabilities).Prior work has identified individual differences that explain risk preferences, but less is knownabout factors associated with ambiguity aversion. Here, we hypothesized that cumulativeexposure to major stressors over the lifespan might be one factor that predicts an individuals’ambiguity aversion. Across two studies (Study 1: n = 58, Mean age = 25.7; Study 2: n = 188, Mean age =39.81), we used a comprehensive lifetime stress exposure inventory (i.e., the Stress andAdversity Inventory for Adults, or STRAIN) and a standard economic approach to quantify riskand ambiguity preferences. Greater lifetime stress exposure as measured by the STRAIN,particularly in early life, was associated with higher aversion to ambiguity but not risk attitudes.

scholarly journals The Evolutionary Explanation of What?

2018 ◽  
Vol 11 (1) ◽  
pp. 31-49
Author(s):  
Bengt Autzen
Keyword(s):  
Prospect Theory ◽  
Risk Preferences ◽  
Evolutionary Explanation ◽  
Risk Sensitive ◽  
Cultural Processes ◽  
Human Decision ◽  
Foraging Models ◽  
Risk Sensitive Foraging ◽  
Fourfold Pattern

The paper examines evolutionary explanations of risk preferences. First, the paper argues that evolutionary psychology is ill-suited for explaining prospect theory risk preferences since the empirical evidence does not support the universality of the fourfold pattern of risk preferences postulated by prospect theory. Second, the paper argues that explaining prospect theory risk preferences by means of risk-sensitive foraging models is incomplete since this approach does not offer a rationale for the observed diversity in human decision making involving monetary gambles. Finally, the paper suggests adopting a wider perspective on evolutionary approaches to human behaviour that also takes into account the role of cultural processes in shaping risk preferences.

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