scholarly journals From Risk-Seeking to Risk-Averse: The Development of Economic Risk Preference from Childhood to Adulthood

2012 ◽  
Vol 3 ◽  
Author(s):  
David J. Paulsen ◽  
Michael L. Platt ◽  
Scott A. Huettel ◽  
Elizabeth M. Brannon
Keyword(s):  
Risk Preference ◽  
Risk Averse ◽  
Economic Risk ◽  
Risk Seeking

scholarly journals The Role of Memory in Distinguishing Risky Decisions from Experience and Description

2017 ◽  
Vol 70 (10) ◽  
pp. 2048-2059 ◽  
Author(s):  
Christopher R. Madan ◽  
Elliot A. Ludvig ◽  
Marcia L. Spetch
Keyword(s):  
Risk Preferences ◽  
Risk Preference ◽  
Risky Choice ◽  
Risk Averse ◽  
Memory Biases ◽  
Opposite Pattern ◽  
Decisions From Experience ◽  
Risk Seeking ◽  
Subject Design

People's risk preferences differ for choices based on described probabilities versus those based on information learned through experience. For decisions from description, people are typically more risk averse for gains than for losses. In contrast, for decisions from experience, people are sometimes more risk seeking for gains than losses, especially for choices with the possibility of extreme outcomes (big wins or big losses), which are systematically overweighed in memory. Using a within-subject design, this study evaluated whether this memory bias plays a role in the differences in risky choice between description and experience. As in previous studies, people were more risk seeking for losses than for gains in description but showed the opposite pattern in experience. People also more readily remembered the extreme outcomes and judged them as having occurred more frequently. These memory biases correlated with risk preferences in decisions from experience but not in decisions from description. These results suggest that systematic memory biases may be responsible for some of the differences in risk preference across description and experience.

Contagion Effect of Risk Preference under the Loss Frame and Its Potential Mechanism

2020 ◽  
Author(s):  
Deng Pan
Keyword(s):  
Risk Preference ◽  
Framing Effect ◽  
Risk Averse ◽  
Potential Mechanism ◽  
Contagion Effect ◽  
Choice Data ◽  
Human Risk ◽  
Risk Seeking ◽  
Learning From Others ◽  
Loss Frame

Our attitude toward risk plays a crucial role in influencing our everyday decision-making. Studies have found that human risk-preference are susceptible to the frame in which options are presented (“framing effect”) and can be altered by observing and learning from others’ risk-related decisions (“risk contagion effect”). In this study, we seek to found out the effect of contagion in risk preference under the context of loss, using choice data and computational modeling.We demonstrated that individual’s risk-preference can be readily shifted after observing other’s choices, and this contagion effect are considerably stronger after observing a risk-averse agent than a risk-seeking one under the Loss frame. We also found the distance in risk preference between observer and observee positively influenced the degree of risk contagion. Taken together, these findings provide a mechanistic account for how observing others’ risky choices can modulate an individual’s own risk-preference.

scholarly journals Macaques are risk-averse in a freely moving foraging task

2019 ◽  
Vol 9 (1) ◽  
Author(s):  
Benjamin R. Eisenreich* ◽  
Benjamin Y. Hayden ◽  
Jan Zimmermann
Keyword(s):  
Evolutionary History ◽  
Rhesus Macaques ◽  
Ecological Validity ◽  
Risk Preference ◽  
Task Design ◽  
Risk Attitudes ◽  
Risk Averse ◽  
Risk Seeking ◽  
Freely Moving ◽  
Foraging Task

Abstract Rhesus macaques (Macaca mulatta) appear to be robustly risk-seeking in computerized gambling tasks typically used for electrophysiology. This behavior distinguishes them from many other animals, which are risk-averse, albeit measured in more naturalistic contexts. We wondered whether macaques’ risk preferences reflect their evolutionary history or derive from the less naturalistic elements of task design associated with the demands of physiological recording. We assessed macaques’ risk attitudes in a task that is somewhat more naturalistic than many that have previously been used: subjects foraged at four feeding stations in a large enclosure. Patches (i.e., stations), provided either stochastically or non-stochastically depleting rewards. Subjects’ patch residence times were longer at safe than at risky stations, indicating a preference for safe options. This preference was not attributable to a win-stay-lose-shift heuristic and reversed as the environmental richness increased. These findings highlight the lability of risk attitudes in macaques and support the hypothesis that the ecological validity of a task can influence the expression of risk preference.

scholarly journals P082 Gender moderates the effects of total sleep deprivation and sleep restriction on risk preference

2021 ◽  
Vol 2 (Supplement_1) ◽  
pp. A47-A48
Author(s):  
J Lim ◽  
J Boardman ◽  
S Drummond ◽  
D Dickinson
Keyword(s):  
Decision Making ◽  
Sleep Deprivation ◽  
Risk Preference ◽  
Sleep Restriction ◽  
Risk Averse ◽  
Risky Decision ◽  
Total Sleep Deprivation ◽  
Risk Levels ◽  
Risk Seeking ◽  
Time In Bed

Abstract Introduction Total sleep deprivation (TSD) affects risk preference in decision-making. However, little work has examined the effects of sleep restriction (SR), or the potentially moderating role of gender, on risk preference. Here, we investigate the effects of TSD, SR, and gender on risky decision-making. Methods 47 healthy adults (age=24.57±5.26 years, 24F) were randomly assigned to either of 2 counterbalanced protocols: 1) well-rested (WR: 9-hours time-in-bed for 6 nights) and 30hours TSD; or 2) WR and SR (4-hours time-in-bed for 4 nights). Participants performed the Lottery Choice Task (LCT) on the last day of each week. LCT requires a series of choices between two risky gambles with different risk levels. In one block, participants sought to maximise monetary gain (GAINS), and in another block, they sought to minimise losses (LOSSES). A trial-level analysis evaluated participants’ likelihood of choosing the “safer” gamble under influence of each sleep condition. Results The version*condition*gender interaction was significant. GAINS: everyone became more risk averse during TSD. Females also became more risk averse during SR, but males did not. LOSSES: everyone became more risk seeking during SR. During TSD, females became relatively more risk averse, while males became relatively more risk seeking. Conclusion TSD and SR had similar impacts on risk preference. However, gender moderated some effects. Women generally became more risk averse during sleep loss for both GAINS and LOSSES. Men were more risk averse for GAINS and risk seeking for LOSSES. This has implications for real-world situations where individuals are required to make risky decisions.

scholarly journals Risk aversion in macaques in a freely moving patch-leaving foraging task

2018 ◽  
Author(s):  
B. R Eisenreich ◽  
Benjamin Y. Hayden
Keyword(s):  
Evolutionary History ◽  
Risk Preference ◽  
Task Design ◽  
Risk Attitudes ◽  
Risk Averse ◽  
Risk Seeking ◽  
Major Exception ◽  
Naturalistic Environment ◽  
Freely Moving ◽  
Foraging Task

ABSTRACTAnimals, including humans, are risk-averse in most contexts. A major exception is the rhesus macaque (Macaca mulatta), which is robustly risk-seeking. Macaques‘ unique preferences may reflect their unique evolutionary history. Alternatively, they may derive from elements of task design associated with the demands of physiological recording, the source of nearly all macaque risk preference data. To disambiguate these possibilities we assessed macaques’ risk attitudes in a somewhat more naturalistic environment: subjects foraged at four feeding stations in a large enclosure. Stations (i.e. patches) provided either stochastically or non-stochastically depleting rewards. Subjects’ patch residence times were longer at safe than at risky stations, indicating a preference for safe options. This preference was not attributable to a win-stay-lose-shift heuristic. These findings highlight the lability of risk attitudes in macaques and support the hypothesis that observed differences between macaques and other species are ephemeral, not evolved.

Loyalty program in Africa: risk-seeking and risk-averse adventurers

2014 ◽  
Vol 69 (2) ◽  
pp. 137-157 ◽  
Author(s):  
Shogo Mlozi
Keyword(s):  
Consumer Behavior ◽  
Consumer Products ◽  
Loyalty Programs ◽  
Risk Averse ◽  
Loyalty Program ◽  
Content Type ◽  
Risk Seeking ◽  
Proposed Model ◽  
First Time ◽  
The Relationship

Purpose – This article aims to test the relationship between expected attractiveness-satisfaction-loyalty for international adventure tourists visiting Tanzania. The proposed model is based on travel consumer behavior theoretical constructs extracted from the literature. Design/methodology/approach – This article aims to test the relationship between expected attractiveness-satisfaction-loyalty for international adventure tourists visiting Tanzania. The proposed model is based on travel consumer behavior theoretical constructs extracted from the literature. Findings – The findings for overall model differed from the moderating factors of high risk, low risk, first-time visit and repeat visit. Also, the results are interesting when satisfaction is tested as a mediator. Practical implications – Practitioners could consider the fact that repeat visits may change tourists’ perceptions toward destination and may even increase their inclination to take on risks. This may impact innovation of consumer products in tourism. Also, policy makers could benefit on how loyalty programs can be developed to increase performance. Originality/value – The study offers specific strategic recommendations toward different groups of tourists (i.e. first-time, repeat visitors, risk averse, risk seeking) and proposes logic for setting up a loyalty program as a long-term strategy for success.

Adversarial Risk Analysis for Auctions Using Mirror Equilibrium and Bayes Nash Equilibrium

2021 ◽  
Author(s):  
Muhammad Ejaz ◽  
Stephen Joe ◽  
Chaitanya Joshi
Keyword(s):  
Nash Equilibrium ◽  
Risk Analysis ◽  
Equilibrium Solution ◽  
Risk Averse ◽  
Prior Work ◽  
Reserve Price ◽  
Solution Concepts ◽  
Risk Seeking ◽  
Sealed Bid ◽  
Sealed Bid Auctions

In this paper, we use the adversarial risk analysis (ARA) methodology to model first-price sealed-bid auctions under quite realistic assumptions. We extend prior work to find ARA solutions for mirror equilibrium and Bayes Nash equilibrium solution concepts, not only for risk-neutral but also for risk-averse and risk-seeking bidders. We also consider bidders having different wealth and assume that the auctioned item has a reserve price.

The effects of personal experience on choice-based preferences for wildfire protection programs

2013 ◽  
Vol 22 (2) ◽  
pp. 234 ◽  
Author(s):  
Thomas P. Holmes ◽  
Armando González-Cabán ◽  
John Loomis ◽  
José Sánchez
Keyword(s):  
Willingness To Pay ◽  
Personal Experience ◽  
Choice Experiment ◽  
Prior Experience ◽  
Preference Heterogeneity ◽  
Risk Averse ◽  
Risk Seeking ◽  
Economic Rationale ◽  
Trade Offs ◽  
Risk Loss

In this paper, we investigate homeowner preferences and willingness to pay for wildfire protection programs using a choice experiment with three attributes: risk, loss and cost. Preference heterogeneity among survey respondents was examined using three econometric models and risk preferences were evaluated by comparing willingness to pay for wildfire protection programs against expected monetary losses. The results showed that while nearly all respondents had risk seeking preferences, a small segment of respondents were risk neutral or risk averse. Only respondents who had personal experience with the effects of wildfire consistently made trade-offs among risk, loss and cost and these respondents were willing to pay more for wildfire protection programs than were respondents without prior experience of the effects of wildfire. The degree to which people with prior experience with the effects of wildfire can effectively articulate an economic rationale for investing in wildfire protection to other members of their own or other communities facing the threat of wildfires may influence the overall success of wildfire protection programs.

Respondents in Asian Cultures (e.g., Chinese) are More Risk-Seeking and More Overconfident than Respondents in Other Cultures (e.g., in United States) but the Reciprocal Predictions are in Total Opposition: How and Why?

2004 ◽  
Vol 4 (2) ◽  
pp. 263-292 ◽  
Author(s):  
Shu Li ◽  
Yongqing Fang
Keyword(s):  
United States ◽  
Social Network ◽  
Risk Taking ◽  
Risk Preferences ◽  
Risk Preference ◽  
Cross Cultural ◽  
Cultural Variations ◽  
Risk Seeking ◽  
The Social ◽  
Predicted Risk

AbstractTriggered by rather surprising findings that respondents in Asian cultures (e.g., Chinese) are more risk-seeking and more overconfident than respondents in other cultures (e.g., in United States) and that the reciprocal predictions are in total opposition, four experiments were designed to extend previous collective-culture oriented researches. Results revealed that (1) Singapore 21, which is a vision of Singapore in the 21st century and has highlighted the promotion of a collective culture, did not advocate greater risk-seeking but led to weaker overconfidence; (2) the knowledge of "financial help from social network" did not permit prediction of risk preference but the knowledge of "the value difference between possible outcomes" did; (3) the social network could be viewed not only as a positive "cushion" but also as a negative "burden" in both gain and loss domains of risky choices; (4) the predictions of the risk-as-value, risk-as-feelings and stereotype hypotheses were not consistent with the predicted risk preferences of others but the predictions of the economic-performance hypothesis were consistent with the predicted risk preferences as well as the predicted overconfidence of others. The implications for cross-cultural variations in overconfidence and for cross-cultural variations in risk-taking were discussed.

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