Increased Risk Aversion and Risky Investment

1993 ◽  
Vol 60 (3) ◽  
pp. 494 ◽  
Author(s):  
Jiarong Fu
Keyword(s):  
Risk Aversion ◽  
Risky Investment ◽  
Increased Risk

scholarly journals Large-scale application of the flood damage model RAilway Infrastructure Loss (RAIL)

2016 ◽  
Vol 16 (11) ◽  
pp. 2357-2371 ◽  
Author(s):  
Patric Kellermann ◽  
Christine Schönberger ◽  
Annegret H. Thieken
Keyword(s):  
Risk Management ◽  
Risk Aversion ◽  
Flood Risk ◽  
Structural Damage ◽  
Large Scale ◽  
Damage Model ◽  
Flood Damage ◽  
Railway Infrastructure ◽  
Increased Risk ◽  
The Impact

Abstract. Experience has shown that river floods can significantly hamper the reliability of railway networks and cause extensive structural damage and disruption. As a result, the national railway operator in Austria had to cope with financial losses of more than EUR 100 million due to flooding in recent years. Comprehensive information on potential flood risk hot spots as well as on expected flood damage in Austria is therefore needed for strategic flood risk management. In view of this, the flood damage model RAIL (RAilway Infrastructure Loss) was applied to estimate (1) the expected structural flood damage and (2) the resulting repair costs of railway infrastructure due to a 30-, 100- and 300-year flood in the Austrian Mur River catchment. The results were then used to calculate the expected annual damage of the railway subnetwork and subsequently analysed in terms of their sensitivity to key model assumptions. Additionally, the impact of risk aversion on the estimates was investigated, and the overall results were briefly discussed against the background of climate change and possibly resulting changes in flood risk. The findings indicate that the RAIL model is capable of supporting decision-making in risk management by providing comprehensive risk information on the catchment level. It is furthermore demonstrated that an increased risk aversion of the railway operator has a marked influence on flood damage estimates for the study area and, hence, should be considered with regard to the development of risk management strategies.

scholarly journals What motivates avoidance in paranoia? Three failures to find a betrayal aversion effect

2021 ◽  
Author(s):  
Anna Greenburgh ◽  
Joseph M Barnby ◽  
Raphaëlle Delpech ◽  
Adam Kenny ◽  
Vaughan Bell ◽  
...  
Keyword(s):  
Risk Aversion ◽  
Social Withdrawal ◽  
Monetary Reward ◽  
Social Mechanism ◽  
Potential Harm ◽  
Aversion Effect ◽  
Large N ◽  
Increased Risk ◽  
Game Theoretic ◽  
Betrayal Aversion

Believing that others intend to harm you (paranoia) is often accompanied by social withdrawal, avoidance and isolation. We investigated whether paranoia is related to betrayal aversion: the tendency to avoid potential harm caused by other people over and above an equivalent harm caused by a non-social mechanism. Across three large-N (Ntotal=2433) pre-registered online studies, we employed a game theoretic paradigm where participants engaged in interactions with real players. Studies 1 and 2 explored betrayal aversion by eliciting participants’ willingness to enter interactions where monetary reward was either determined by another player or a lottery. Study 3 examined betrayal aversion in a context where choices were not financially-incentivised. Paranoia was not associated with betrayal aversion or risk aversion in any study. We consider two possibilities: that paranoia does not involve increased risk aversion or betrayal aversion, or that the paradigm was limited in terms of its ability to trigger betrayal and risk aversion behaviour in paranoia.

scholarly journals Impact of Induced Moods, Sensation Seeking, and Emotional Contagion on Economic Decisions Under Risk

2022 ◽  
Vol 12 ◽  
Author(s):  
Kirill Efimov ◽  
Ioannis Ntoumanis ◽  
Olga Kuskova ◽  
Dzerassa Kadieva ◽  
Ksenia Panidi ◽  
...  
Keyword(s):  
Risk Aversion ◽  
Personality Traits ◽  
Risk Taking ◽  
Sensation Seeking ◽  
Financial Risk ◽  
Emotional Contagion ◽  
Simple Task ◽  
Decisions Under Risk ◽  
Increased Risk ◽  
Sad Mood

In addition to probabilities of monetary gains and losses, personality traits, socio-economic factors, and specific contexts such as emotions and framing influence financial risk taking. Here, we investigated the effects of joyful, neutral, and sad mood states on participants’ risk-taking behaviour in a simple task with safe and risky options. We also analysed the effect of framing on risk taking. In different trials, a safe option was framed in terms of either financial gains or losses. Moreover, we investigated the effects of emotional contagion and sensation-seeking personality traits on risk taking in this task. We did not observe a significant effect of induced moods on risk taking. Sad mood resulted in a slight non-significant trend of risk aversion compared to a neutral mood. Our results partially replicate previous findings regarding the presence of the framing effect. As a novel finding, we observed that participants with a low emotional contagion score demonstrated increased risk aversion during a sad mood and a similar trend at the edge of significance was present in high sensation seekers. Overall, our results highlight the importance of taking into account personality traits of experimental participants in financial risk-taking studies.

Self-insurance, self-protection and increased risk aversion

1985 ◽  
Vol 17 (1-2) ◽  
pp. 39-42 ◽  
Author(s):  
Georges Dionne ◽  
Louis Eeckhoudt
Keyword(s):  
Risk Aversion ◽  
Increased Risk ◽  
Self Protection

scholarly journals Large-scale application of the flood damage model Railway Infrastructure Loss (RAIL)

2016 ◽  
Author(s):  
Patric Kellermann ◽  
Christine Schönberger ◽  
Annegret H. Thieken
Keyword(s):  
Risk Management ◽  
Risk Aversion ◽  
Flood Risk ◽  
Structural Damage ◽  
Large Scale ◽  
Damage Model ◽  
Flood Damage ◽  
Railway Infrastructure ◽  
Increased Risk ◽  
The Impact

Abstract. Experience has shown that river floods can significantly hamper the reliability of railway networks and cause extensive structural damage and disruption. As a result, the national railway operator in Austria had to cope with financial losses of more than one hundred million euros due to flooding in recent years. Comprehensive information on potential flood risk hot spots as well as on expected flood damage in Austria is therefore needed for strategic flood risk management. In view of this, the flood damage model RAIL (RAilway Infrastructure Loss) was applied to estimate 1) the expected structural flood damage, and 2) the resulting repair costs of railway infrastructure due to a 30-year, 100-year and 300-year flood in the Austrian Mur River catchment. The results were then used to calculate the expected annual damage of the railway subnetwork and subsequently analysed in terms of their sensitivity to key model assumptions. Additionally, the impact of risk aversion on the estimates was investigated, and the overall results were briefly discussed against the background of climate change and possibly resulting changes in flood risk. The findings indicate that the RAIL model is capable of supporting decision-making in risk management by providing comprehensive risk information on the catchment level. It is furthermore demonstrated that an increased risk aversion of the railway operator has a marked influence on flood damage estimates for the study area and, hence, should be considered with regard to the development of risk management strategies.

Exploring the relationship between investment choices, cognitive abilities risk attitudes and financial literacy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Mushafiq ◽  
Shamsa Khalid ◽  
Muhammad Khalid Sohail ◽  
Tayyebah Sehar
Keyword(s):  
Risk Aversion ◽  
Financial Literacy ◽  
Cognitive Abilities ◽  
Risk Attitudes ◽  
Positive Contribution ◽  
Content Type ◽  
Risky Investment ◽  
Investment Intentions ◽  
The Relationship ◽  
Investment Choices

PurposeThe main purpose of this study is to investigate the investment choices' relationship with cognitive abilities, risk aversion, risky investment intentions, subjective financial literacy and objective financial literacy.Design/methodology/approachTo examine the relationship, two investment choices were given to 256 subjects from Pakistan. Questionnaire had total 20 questions for measuring five variables. To review this nexus, discriminant analysis was used as to explore the depth of the nexus that is the ability of the variables to predict the investment choices.FindingsThis study establishes the findings that Investment choices are guided by risk aversion, risky investment intentions, financial literacy (subjective and objective) and cognitive abilities. The risk aversion has negative relation to investment choices and other variables depict positive relationship to with investment choices.Practical implicationsThis study provides a new and useful understanding into the existing literature on investment choices. The results are significant as the cognitive abilities show a positive contribution to the investment choices. This is point of significance as the portfolio managers and advisors would get help in regards of advising investments as they are aware what factors impact the investment choices.Originality/valueThis study is novel in its nature to evaluate investment choices using the cognitive ability alongside risk attitudes and financial literacy.

Relationship between risk aversion, risky investment intention, investment choices

Kybernetes ◽  
2020 ◽  
Vol 49 (11) ◽  
pp. 2651-2682
Author(s):  
Selim Aren ◽  
Hatice Nayman Hamamci
Keyword(s):  
Risk Aversion ◽  
Personality Traits ◽  
Financial Literacy ◽  
Big Five Personality ◽  
Content Type ◽  
Face To Face ◽  
Bank Deposits ◽  
Risky Investment ◽  
Survey Instruments ◽  
Investment Choices

Purpose This paper aims to examine the effects of subjective and financial literacy, big five personality traits and emotions (fear, anger, hope and sadness) on risk aversion, risky investment intention and investment choices were investigated. Interactions of these three variables (risk aversion, risky investment intention and investment choices) were also examined. Design/methodology/approach For this purpose, in January-February 2019, collected data on 446 subjects from Turkey using the internet (341) and face-to-face (105) survey instruments. The authors exploited IBM SPSS Statistics for analysis. ANOVA, t-test and discriminant analysis were performed. Findings As a result of the analyzes, two personality traits (neuroticism and openness) and two emotions (fear and sadness) were determined as predictors of risk aversion. For risky investment intention, risk aversion, two personality traits (neuroticism and openness) and one of the same and other one different two emotions (fear and anger) were found. Originality/value Investment choices can be estimated by objective financial literature, risk aversion and risky investment intention. In addition, individuals’ risk averse or risk taking characteristics differ according to their level of sadness with agreeableness, conscientiousness and neuroticism personality traits. Similarly, have a risky investment intention or have not risky investment intention also differs according to sadness emotions with conscientiousness and openness. Finally, the choice of stocks or bank deposits varies according to subjective financial literacy and extraversion personality trait.

Sign in / Sign up

Export Citation Format

Share Document