On The Correlated Impact Of The Factors Of Risk Aversion On Decision-Making
AbstractRisk aversion is among the most advertised and complex factors influencing a decision, but it is itself subject to an intricate complex of both objective and subjective factors. The present paper set out to investigate some of the factors that would have appeared obvious in influencing attitudes towards risk, such as value of options, probability of options, level of information (specifically on probability) and position of the respondent relative to the outcome of the risk (loss or gain). For this purpose we devised a survey testing each of these elements and allowing for interpretation of their interdependence. After analyzing hypothetical situations, we also investigated how these were reflected in self-assessment and real-life behavior. What we found is that, although these factors do play their intuitive role in fundamenting decisions in contexts of risk, they are ill correlated to one another and may themselves not be coherent across different contexts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by ScientificPapers.org in its journal Journal of Knowledge Management, Economics and Information Technology.
Volume (Year): 1 (2011)
Issue (Month): 4 (June)
Contact details of provider:
Web page: http://www.scientificpapers.org
risk aversion; decision-making; factor correlation;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
- C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Elke U. Weber & Christopher Hsee, 1998. "Cross-Cultural Differences in Risk Perception, but Cross-Cultural Similarities in Attitudes Towards Perceived Risk," Management Science, INFORMS, vol. 44(9), pages 1205-1217, September.
- Kenneth R. MacCrimmon & Donald A. Wehrung, 1990. "Characteristics of Risk Taking Executives," Management Science, INFORMS, vol. 36(4), pages 422-435, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adrian Ghencea).
If references are entirely missing, you can add them using this form.