Risk-Taking Behavior with Limited Liability and Risk Aversion

1997 ◽  
Vol 64 (2) ◽  
pp. 347 ◽  
Author(s):  
Christian Gollier ◽  
Pierre-Francois Koehl ◽  
Jean-Charles Rochet
Keyword(s):  
Risk Aversion ◽  
Risk Taking ◽  
Limited Liability ◽  
Risk Taking Behavior

Equity-Based Incentives, Risk Aversion, and Merger-Related Risk-Taking Behavior

2014 ◽  
Vol 49 (1) ◽  
pp. 117-148 ◽  
Author(s):  
Bradley W. Benson ◽  
Jung Chul Park ◽  
Wallace N. Davidson
Keyword(s):  
Risk Aversion ◽  
Risk Taking ◽  
Related Risk ◽  
Risk Taking Behavior

scholarly journals Market shocks and professionals' investment behavior – Evidence from the COVID-19 crash

2020 ◽  
Author(s):  
Christoph Huber ◽  
Juergen Huber ◽  
Michael Kirchler
Keyword(s):  
Stock Market ◽  
Risk Aversion ◽  
Risk Taking ◽  
Investment Behavior ◽  
Controlled Experiments ◽  
Price Expectations ◽  
Market Crashes ◽  
Changes In Risk ◽  
Risk Taking Behavior ◽  
Market Shocks

We investigate how the experience of stock market shocks, such as the COVID-19 crash, influences risk-taking behavior. To isolate changes in risk taking from other factors during stock market crashes, we ran controlled experiments with finance professionals in December 2019 and March 2020. We observe that their investments in the experiment were 12 percent lower in March 2020 than in December 2019, although their price expectations had not changed, and although they considered the experimental asset less risky during the crash than before. Thus, lower investments are driven by higher risk aversion, not by changes in beliefs.

P3-133: Altered risk-aversion and risk-taking behavior in Alzheimer's disease: A preliminary study

2010 ◽  
Vol 6 ◽  
pp. S489-S489
Author(s):  
Ju-Won Ha ◽  
Eun-Jin Kim ◽  
Yeo-Jin Kang ◽  
Se-Won Lim ◽  
Kang-Seob Oh
Keyword(s):  
Alzheimer’S Disease ◽  
Alzheimer's Disease ◽  
Risk Aversion ◽  
Risk Taking ◽  
Preliminary Study ◽  
Risk Taking Behavior

scholarly journals Altered Risk-Taking Behavior in Early-Stage Bipolar Disorder With a History of Psychosis

2021 ◽  
Vol 12 ◽  
Author(s):  
Sandra Chi Yiu Wong ◽  
Mary Chung Mun Ng ◽  
Joe Kwun Nam Chan ◽  
Martha Sin Ki Luk ◽  
Simon Sai Yu Lui ◽  
...  
Keyword(s):  
Bipolar Disorder ◽  
Risk Aversion ◽  
Risk Taking ◽  
Cognitive Functions ◽  
Early Stage ◽  
First Episode ◽  
Increased Risk ◽  
Significant Difference ◽  
History Of ◽  
Risk Taking Behavior

Altered risk-taking propensity is an important determinant of functional impairment in bipolar disorder. However, prior studies primarily assessed patients with chronic illness, and risk-taking has not been evaluated in the early illness course. This study investigated risk-taking behavior in 39 euthymic early-stage bipolar disorder patients aged 16–40 years who were treated within 3 years from their first-episode mania with psychotic features and 36 demographically-matched healthy controls using the Balloon Analog Risk Task (BART), a well-validated risk-taking performance-based paradigm requiring participants to make responses for cumulative gain at increasing risk of loss. Relationships of risk-taking indices with symptoms, self-reported impulsivity, cognitive functions, and treatment characteristics were also assessed. Our results showed that patients exhibited significantly lower adjusted scores (i.e., average balloon pumps in unexploded trials) (p = 0.001), lower explosion rate (p = 0.007) and lower cumulative scores (p = 0.003) than controls on BART, indicating their suboptimal risk-taking performance with increased propensity for risk aversion. Risk-taking indices were not correlated with any symptom dimensions, self-reported impulsivity, cognitive functions or antipsychotic dose. No significant difference was observed between patients with and without antipsychotic medications on self-reported impulsivity or any of the BART performance indices. This is the first study to examine risk-taking behavior in early-stage bipolar disorder with history of psychosis and indicates that patients displayed altered risk-taking with increased risk aversion compared with controls. Further research is needed to clarify longitudinal trajectory of risk-taking propensity and its relationships with psychosis and functional outcome in the early stage of bipolar disorder.

Gender diversity and bank risk-taking: an empirical investigation in Italy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Elisa Menicucci ◽  
Guido Paolucci
Keyword(s):  
Risk Aversion ◽  
Risk Taking ◽  
Gender Diversity ◽  
Risk Profile ◽  
Capital Adequacy ◽  
Bank Risk ◽  
Gender Quotas ◽  
Content Type ◽  
Board Directors ◽  
Risk Taking Behavior

Purpose The purpose of this paper is to investigate the relationship between gender diversity and the risk profile of Italian banks during the period 2015–2019. This study examines whether the presence of female board directors or top executives has any significant effect on bank risk-taking. Design/methodology/approach To explore the influence of women on bank risk-taking, the authors analyzed a sample of 387 Italian banks and developed an econometric model applying unbalanced panel data with firm fixed effects and controls per year. Within a multivariate regression model, the authors considered five risk dimensions to verify the effect of gender diversity. Findings The findings suggest that female board directors and executives are considerably more risk averse and less overconfident than their male colleagues, thus confirming a negative causality between risk-taking and gender diversity. The results reveal that banks headed by women are less risky because they report higher capital adequacy and equity to assets ratios. As credit risk in female-led banks is no different from male-led ones, higher capital adequacy does not derive from lower asset quality because it is linked to the higher risk aversion of female directors and top managers. Research limitations/implications From a theoretical standpoint, the results suggest that having women in executive positions entails different risk implications for Italian banks; from a managerial perspective, the results highlight conditions that may promote the role of women in the banking sector. The conclusions are of particular significance because they provide some support for the view that regulators should favor gender quotas in the board management of banks to reduce risk-taking behavior. Originality/value This paper offers an in-depth examination of the risk practices of banks and it attempts to bridge the gap in prior literature on the risk profile of the Italian banking industry given that few empirical studies have examined the determinants of risk-taking in this field, to date. The findings on the higher risk aversion of women directors advance the understanding of the determinants of risk-taking behavior in banks, suggesting that gender quotas in bank boards can contribute to reducing risk-taking behavior. This also unveils some policy implications for bank regulatory authorities.

Predicting Stock Market Performance

2020 ◽  
pp. 1-10
Author(s):  
Thomas Plieger ◽  
Thomas Grünhage ◽  
Éilish Duke ◽  
Martin Reuter
Keyword(s):  
Stock Market ◽  
Risk Taking ◽  
Life Stress ◽  
Price Volatility ◽  
Individual Characteristics ◽  
Self Report ◽  
Financial Behavior ◽  
Market Simulation ◽  
Stock Market Performance ◽  
Risk Taking Behavior

Abstract. Gender and personality traits influence risk proneness in the context of financial decisions. However, most studies on this topic have relied on either self-report data or on artificial measures of financial risk-taking behavior. Our study aimed to identify relevant trading behaviors and personal characteristics related to trading success. N = 108 Caucasians took part in a three-week stock market simulation paradigm, in which they traded shares of eight fictional companies that differed in issue price, volatility, and outcome. Participants also completed questionnaires measuring personality, risk-taking behavior, and life stress. Our model showed that being male and scoring high on self-directedness led to more risky financial behavior, which in turn positively predicted success in the stock market simulation. The total model explained 39% of the variance in trading success, indicating a role for other factors in influencing trading behavior. Future studies should try to enrich our model to get a more accurate impression of the associations between individual characteristics and financially successful behavior in context of stock trading.

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