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Are risk preferences consistent?: the influence of decision domain and personality

Soane, Emma and Chmiel, Nik (2005) Are risk preferences consistent?: the influence of decision domain and personality. Personality and Individual Differences, 38 (8). pp. 1781-1791. ISSN 0191-8869

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Abstract

This paper examines the consistency of risk preferences across three decision domains important in most people’s lives: work, health and personal finance. We consider the degree to which the five factor model of personality and a range of factors that influence risk-related decision-making (perceived risk, framing, emotions and cost–benefit analysis) impact upon cross-domain consistency. Data were gathered from a sample of participants for whom approaches to risk were likely to vary (academics, chess players, firefighters, mountaineers and City traders). The results showed that participants could be categorised into two groups: those who were consistent in their risk preferences in three decision domains, and those who were inconsistent or domain-specific. The consistent group was significantly lower on neuroticism and higher on agreeableness and conscientiousness with a less variable approach to weighing up the costs and benefits of taking risks than the inconsistent group. The majority of the consistent group was risk averse.

Item Type: Article
Official URL: http://www.sciencedirect.com/science/journal/01918...
Additional Information: © 2005 Elsevier Ltd
Library of Congress subject classification: H Social Sciences > HB Economic Theory
B Philosophy. Psychology. Religion > BF Psychology
Sets: Departments > Management
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 18 Nov 2009 16:56
URL: http://eprints.lse.ac.uk/25791/

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