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Personality and domain-specific risk taking

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Author Info

  • Nigel Nicholson
  • Emma Soane
  • Mark Fenton-O'Creevy
  • Paul Willman
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    Abstract

    The concept of risk propensity has been the subject of both theoretical and empirical investigation, but with little consensus about its definition and measurement. To address this need, a new scale assessing overall risk propensity in terms of reported frequency of risk behaviours in six domains was developed and applied: recreation, health, career, finance, safety and social. The paper describes the properties of the scale and its correlates: demographic variables, biographical self-reports, and the NEO PI-R, a Five Factor personality inventory ( N = 2041). There are three main results. First, risk propensity has clear links with age and sex, and with objective measures of career-related risk taking (changing jobs and setting up a business). Second, the data show risk propensity to be strongly rooted in personality. A clear Big Five pattern emerges for overall risk propensity, combining high extraversion and openness with low neuroticism, agreeableness, and conscientiousness. At the subscale level, sensation-seeking surfaces as a key important component of risk propensity. Third, risk propensity differs markedly in its distribution across job types and business sectors. These findings are interpreted as indicating that risk takers are of three non-exclusive types: stimulation seekers, goal achievers, and risk adapters. Only the first group is truly risk seeking, the others are more correctly viewed as risk bearers . The implications for risk research and management are discussed.

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    File URL: http://hdl.handle.net/10.1080/1366987032000123856
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Journal of Risk Research.

    Volume (Year): 8 (2005)
    Issue (Month): 2 (March)
    Pages: 157-176

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    Handle: RePEc:taf:jriskr:v:8:y:2005:i:2:p:157-176

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    Web page: http://www.tandfonline.com/RJRR20

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    Cited by:
    1. Emma Soane & Chris Dewberry & Sunitha Narendran, 2010. "The role of perceived costs and perceived benefits in the relationship between personality and risk-related choices," LSE Research Online Documents on Economics 28353, London School of Economics and Political Science, LSE Library.
    2. Traag Tanja & Velden Rolf van der, 2012. "The Effects of Cognitive and Non-Cognitive Skills on Early School-Leaving," Research Memorandum 020, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    3. Marco Caliendo & Frank M. Fossen & Alexander S. Kritikos, 2011. "Personality Characteristics and the Decision to Become and Stay Self-Employed," SOEPpapers on Multidisciplinary Panel Data Research 369, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Jan-Erik Lönnqvist & Markku Verkasalo & Gari Walkowitz & Philipp Christoph Wichardt, 2014. "Measuring Individual Risk Attitudes in the Lab: Task or Ask? An Empirical Comparison," CESifo Working Paper Series 4663, CESifo Group Munich.
    5. Alexander Pepper & Julie Gore, 2013. "The economic psychology of incentives: an international study of top managers," LSE Research Online Documents on Economics 51655, London School of Economics and Political Science, LSE Library.
    6. Ann Congleton, 2014. "Beyond Business Ethics: An Agenda for the Trustworthy Teachers and Practitioners of Business," Journal of Business Ethics, Springer, vol. 119(2), pages 151-172, January.
    7. Caliendo, Marco & Kritikos, Alexander S. & Künn, Steffen & Loersch, Christian & Schröder, Helmut & Schütz, Holger, 2014. "Report No. 61: Evaluation der Programme "Gründercoaching Deutschland" und "Gründercoaching Deutschland – Gründungen aus der Arbeitslosigkeit"," IZA Research Reports 61, Institute for the Study of Labor (IZA).
    8. Cooper, W.W. & Kingyens, Angela T. & Paradi, Joseph C., 2014. "Two-stage financial risk tolerance assessment using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 233(1), pages 273-280.

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