Understanding Risk and Risk-Taking Behaviour

Lecture 9

Sitkin & Pablo (1992) Conceptual Framework of Risk-Taking Behaviour

risk perceptions influence taking/avoiding risks. perceptions shaped by context.

risk propensity = tendency for risk-taking vs avoiding. stable but changeable over time.

risk perception = assessment of situation risk. reflects extent individual perceives situations as neg./threat/out of control.

outcome expectancy = judgements of controllability of outcome, regardless of ability to influence.

Modern View of Risk (Mishra, 2014)

risk = uncertainty + possible gains/losses. not just danger, also opportunity.

Risk Propensity

Kogan & Wallach (1964) - general tendency to take/avoid risks. important for understanding who takes risks + why.

Josef et al. (2016) - varies between individuals; can change with experience/age.

Risky Behaviour (Trimpop, 1994)

behaviour where:-

• outcomes uncertain

• potentially sig. costs/benefits

• affects physical, economic or psychosocial wellbeing

take risks due to expectations based on past experience. mediated by speed of learning from outcomes, degree of hating losses/loving gains + tolerance for uncertainty.

Typical Traits of Risk-Takers (Zuckerman, 2007)

• impulsive, sensation-seeking

• higher boredom proneness

• difficulty regulating emotions

• risky financial behaviours

• risky health/safety behaviours

• risky social/ethical behaviours

alcohol and drugs intensify risk-taking + peer pressure and social norms.

Risk Domains

risk-taking varies across domains e.g. finance, gambling, social, health (Mirsha, 2014).

risk unavoidable → decisions involve uncertainty + meaningful consequences. risk propensity differs due to traits/experiences.

risk perceptions drive behaviour - influenced by context/how situation is presented (framing).

Nicholson et al. (2006)

risk propensity links with age, sex + objective measures of career-related risk taking.

risk propensity high in extraversion and openness, low in neuroticism, agreeableness, and conscientiousness. 

Rolison, Hanoch & Woods (2012)

age differences may depend on methodology of measuring risk-taking.

BART - behaviour depends on DM’s initial risk perception about first balloon+how DM adjusts behaviour in response to gains/losses.

young adults INITIALLY more willing to take greater risks - changes with experience.

older adults use simpler decision strats, make more errors (Mata et al., 2010).

Ps attend more to losses than gains.