Arbeitspapier

Willingness to Take Risk: The Role of Risk Conception and Optimism

We show that the disposition to focus on favorable or unfavorable outcomes of risky situations affects willingness to take risk as measured by the general risk question. We demonstrate that this disposition, which we call risk conception, is strongly associated with optimism, a stable facet of personality and that it predicts real-life risk taking. The general risk question captures this disposition alongside pure risk preference. This enlightens why the general risk question is a better predictor of behavior under risk across different domains than measures of pure risk preference. Our results also rationalize why risk taking is related to optimism.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 11642

Classification
Wirtschaft
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Design of Experiments: Laboratory, Individual
Criteria for Decision-Making under Risk and Uncertainty
Microeconomic Behavior: Underlying Principles
Subject
risk taking behavior
optimism
preference measures
risk conception

Event
Geistige Schöpfung
(who)
Dohmen, Thomas
Quercia, Simone
Willrodt, Jana
Event
Veröffentlichung
(who)
Institute of Labor Economics (IZA)
(where)
Bonn
(when)
2018

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dohmen, Thomas
  • Quercia, Simone
  • Willrodt, Jana
  • Institute of Labor Economics (IZA)

Time of origin

  • 2018

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