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Risk-taking in entrepreneurs, compared to criminals and students: The role of uncertainty and stakes

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  • Faragó, Klára
  • Kiss, Orhidea
  • Boros, János

Abstract

Entrepreneurs', college students' and criminals' risk-taking were compared in hypothetical bet situations. The level of uncertainty and the amount staked were varied in gain and loss situations. Potential profit motivates entrepreneurs to choose higher stakes, expected loss will prompt the avoidance of risk. In profit-making situations, college students' strategies are different: Students' decisions are more influenced by probability factors than by the amount staked. Risk-taking tendency of criminals is higher than that of the other two groups, without applying a consistent strategy in taking risk.

Suggested Citation

  • Faragó, Klára & Kiss, Orhidea & Boros, János, 2008. "Risk-taking in entrepreneurs, compared to criminals and students: The role of uncertainty and stakes," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2231-2241, December.
    • Handle: RePEc:eee:soceco:v:37:y:2008:i:6:p:2231-2241
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    References listed on IDEAS

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    Cited by:

    1. José Neves Cruz, 2013. "Is white-collar crime a form of entrepreneurship?," OBEGEF Working Papers 022, OBEGEF - Observatório de Economia e Gestão de Fraude;OBEGEF Working Papers on Fraud and Corruption.
    2. Fenzl, Thomas & Brudermann, Thomas, 2009. "Risk behavior in decision-making in a multi-person-setting," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(5), pages 752-756, October.
    3. Armel Irankunda & Gregory N. Price & Norense E. Uzamere & Miesha J. Williams, 2020. "Ex-Incarceree/Convict Status: Beneficial for Self-Employment and Entrepreneurship?," The American Economist, Sage Publications, vol. 65(1), pages 144-162, March.
    4. Murat C. Mungan & Jonathan Klick, 2014. "Forfeiture of Illegal Gains, Attempts, and Implied Risk Preferences," The Journal of Legal Studies, University of Chicago Press, vol. 43(1), pages 137-153.
    5. Evan M. Calford & Gregory DeAngelo, 2023. "Ambiguity and enforcement," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 304-338, April.

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