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Strong Evidence for Gender Differences in Risk Taking

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  • Charness, Gary
  • Gneezy, Uri

Abstract

Are men more willing to take financial risks than women? The answer to this question has immediate relevance for many economic issues. We assemble the data from 15 sets of experiments with one simple underlying investment game. Most of these experiments were not designed to investigate gender differences and were conducted by different researchers in different countries, with different instructions, durations, payments, subject pools, etc. The fact that all data come from the same basic investment game allows us to test the robustness of the findings. We find a very consistent result that women invest less, and thus appear to be more financially risk averse than men.

Suggested Citation

  • Charness, Gary & Gneezy, Uri, 2012. "Strong Evidence for Gender Differences in Risk Taking," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 50-58.
  • Handle: RePEc:eee:jeborg:v:83:y:2012:i:1:p:50-58 DOI: 10.1016/j.jebo.2011.06.007
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    References listed on IDEAS

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    1. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Monash Economics Working Papers archive-03, Monash University, Department of Economics.
    2. Bellemare, Charles & Krause, Michaela & Kroger, Sabine & Zhang, Chendi, 2005. "Myopic loss aversion: Information feedback vs. investment flexibility," Economics Letters, Elsevier, pages 319-324.
    3. Uri Gneezy & Jan Potters, 1997. "An Experiment on Risk Taking and Evaluation Periods," The Quarterly Journal of Economics, Oxford University Press, pages 631-645.
    4. Uri Gneezy & Kenneth L. Leonard & John A. List, 2009. "Gender Differences in Competition: Evidence From a Matrilineal and a Patriarchal Society," Econometrica, Econometric Society, vol. 77(5), pages 1637-1664, September.
    5. Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
    6. Dreber, Anna & Rand, David G. & Garcia, Justin R. & Wernerfelt, Nils & Lum, J. Koji & Zeckhauser, Richard, 2010. "Dopamine and Risk Preferences in Different Domains," Working Paper Series rwp10-012, Harvard University, John F. Kennedy School of Government.
    7. Michael S. Haigh & John A. List, 2005. "Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis," Journal of Finance, American Finance Association, vol. 60(1), pages 523-534, February.
    8. Uri Gneezy & Jan Potters, 1997. "An Experiment on Risk Taking and Evaluation Periods," The Quarterly Journal of Economics, Oxford University Press, pages 631-645.
    9. Renate Schubert, 1999. "Financial Decision-Making: Are Women Really More Risk-Averse?," American Economic Review, American Economic Association, pages 381-385.
    10. Sunden, Annika E & Surette, Brian J, 1998. "Gender Differences in the Allocation of Assets in Retirement Savings Plans," American Economic Review, American Economic Association, pages 207-211.
    11. Ertac, Seda & Gurdal, Mehmet Y., 2012. "Deciding to decide: Gender, leadership and risk-taking in groups," Journal of Economic Behavior & Organization, Elsevier, pages 24-30.
    12. Jianakoplos, Nancy Ammon & Bernasek, Alexandra, 1998. "Are Women More Risk Averse?," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 620-630, October.
    13. Seda Ertac & Mehmet Y. Gurdal, 2010. "Deciding to Decide: Gender, Leadership and Risk-Taking in Groups," Koç University-TUSIAD Economic Research Forum Working Papers 1028, Koc University-TUSIAD Economic Research Forum.
    14. Gary Charness & Uri Gneezy, 2010. "Portfolio Choice And Risk Attitudes: An Experiment," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 133-146, January.
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    16. repec:dgr:kubcen:200432 is not listed on IDEAS
    17. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, pages 448-474.
    18. Powell, Melanie & Ansic, David, 1997. "Gender differences in risk behaviour in financial decision-making: An experimental analysis," Journal of Economic Psychology, Elsevier, pages 605-628.
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    More about this item

    Keywords

    Gender differences; Experiment; Risk attitudes;

    JEL classification:

    • B49 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Other
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G19 - Financial Economics - - General Financial Markets - - - Other
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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