Risk aversion in information seeking

The information gain model argues that participants select alternatives with a larger expected value of information gain. The present study investigated risk aversion in information seeking to examine whether the expected value always determines information-seeking behaviour. For this investigation, we used a scale method selection task in which participants were required to select one of two scales for weighing coins in order to find an underweight coin. Two experiments showed that participants more frequently selected the alternative that provided information gain without risk, although its expected information gain was smaller. This finding indicates the presence of risk aversion in information seeking, suggesting that information-seeking behaviour is affected by risk associated with obtaining information gain.     

Health-Related Risk Perception and Decision-Making: Lessons from the Study of Motives in Social Psychology

Much research in the decision sciences has shown that risk perception and decision-making are influenced not only by cognitive processes – such as the use of statistical 'rules of thumb'– but also by motives such as loss aversion, ambiguity aversion, and regret aversion. The field of social psychology has long been interested in a variety of motives that influence self-judgment, social perception, and interpersonal relations. These include, among others, self-enhancement, social comparison, predictability/control, favorable self-presentation, effective resource management, preparedness for bad news, goal attainment, and existential meaning. We suggest that more attention to these motives would greatly strengthen our understanding of how people think about risk and how they make decisions. In this article, we consider the influence of motives on risk perception and decision-making in the context of health outcomes. We argue that theories relating to these various motives (e.g., social comparison theory) can be greatly enhanced by testing them in the context of health-related risk perception and decision-making.     

Risk and Prisoner's Dilemma: A Reinterpretation of Coombs' Re‐parameterization

We propose a model to measure risk in a prisoner's dilemma based on Coombs' (1973) re‐parameterization of the game as an individual risk decision‐making task that chooses between a gamble of cooperation and another gamble of defection. Specifically, we propose an index, r, to represent the risk associated with cooperation relative to defection. In conjunction with Rapoport's (1967) index of cooperation (K), our formulation of risk allows us to construct games that vary in risk (as indexed by r) while controlling for cooperativeness (as indexed by K). Following utility analysis that models risk seeking as a convex utility function and risk averse as a concave function, we predict that risk‐seeking people cooperate more in games that the cooperation choice is more risky, whereas risk‐averse people cooperate more in games that the cooperation choice is less risky. In the three studies that we varied game parameters, used different measures of risk orientation and prosocial orientation and used different experimental procedures, we found robust results supporting our predictions. Theoretical analysis of our formulation further suggests that risk and cooperativeness of a prisoner's dilemma game is not entirely independent. Games that have a higher cooperativeness index are necessarily more risky. Copyright © 2011 John Wiley & Sons, Ltd.     

Risk seeking for losses modulates the functional connectivity of the default mode and left frontoparietal networks in young males

Value-based decision making (VBDM) is a principle that states that humans and other species adapt their behavior according to the dynamic subjective values of the chosen or unchosen options. The neural bases of this process have been extensively investigated using task-based fMRI and lesion studies. However, the growing field of resting-state functional connectivity (RSFC) may shed light on the organization and function of brain connections across different decision-making domains. With this aim, we used independent component analysis to study the brain network dynamics in a large cohort of young males (N = 145) and the relationship of these dynamics with VBDM. Participants completed a battery of behavioral tests that evaluated delay aversion, risk seeking for losses, risk aversion for gains, and loss aversion, followed by an RSFC scan session. We identified a set of large-scale brain networks and conducted our analysis only on the default mode network (DMN) and networks comprising cognitive control, appetitive-driven, and reward-processing regions. Higher risk seeking for losses was associated with increased connectivity between medial temporal regions, frontal regions, and the DMN. Higher risk seeking for losses was also associated with increased coupling between the left frontoparietal network and occipital cortices. These associations illustrate the participation of brain regions involved in prospective thinking, affective decision making, and visual processing in participants who are greater risk-seekers, and they demonstrate the sensitivity of RSFC to detect brain connectivity differences associated with distinct VBDM parameters.     

Framing in Resource Dilemmas: Loss Aversion and the Moderating Effects of Sanctions

Two resource dilemmas, the commons dilemma, in which individuals take from a common resource, and the public goods problem, in which individuals give to a common good, were experimentally compared. Although they provide equivalent outcomes, the two dilemmas involve different frames of reference and are not psychologically equivalent. We also examined sanction systems, which involve contributions by individuals in the dilemma to provide rewards and penalties for cooperation. The results of Experiment 1 supported the hypothesis that public goods problems ("give dilemmas") activate greater loss aversion and less cooperation than commons dilemmas ("take dilemmas"), and that this effect is moderated by sanction systems. No difference between dilemmas was obtained when either the reward or penalty sanction was present, indicating that sanctions cause a shift in frame of reference to the aspiration of obtaining the reward or avoiding the penalty. The penalty sanction and especially the reward sanction produced greater cooperation. Also, as expected, loss aversion heightened exploitation: when the others were cooperative, a give dilemma generated less cooperation than a take dilemma. In Experiment 2, we extended the concept of frame and loss aversion to the structure of sanction systems, finding that subjects were more likely to contribute to a "take sanction" than to a "give sanction." We discuss potential sources of reference points and loss aversion in resource dilemmas and the likely impact on cooperation.     

Risk Orientation,Risk Exposure,and Policy Opinions: The Case of Free Trade

This research offers a general framework for thinking about how individual disposition towards risk influences public policy opinions. Affinity for or aversion to risk is, in part, a stable personality characteristic that interacts with risk and reward messages in complex policy debates. We examine the implications of this for public opinions about free trade with extensions to immigration policy. We argue and find that opinions about policy depend jointly upon one's exposure to potential gains or losses and one's risk orientation. The findings have implications for crafting and framing public policies because they highlight how individual characteristics are likely to shape the public response to policy proposals. Our findings suggest that there may be limits, in the aggregate, to the degree to which elites can alter the level of support for policies through framing or through offering risk‐mitigating policy provisions.     

Why are Women More Religious than Men? Do Risk Preferences and Genetic Risk Predispositions Explain the Gender Gap?

Risk preference theory argues that the gender gap in religiosity is caused by greater female risk aversion. Although widely debated, risk preference theory has been inadequately tested. Our study tests the theory directly with phenotypic and genetic risk preferences in three dimensions—general, impulsive, and sensation-seeking risk. Moreover, we examine whether the effects of different dimensions of risk preferences on the gender gap vary across different dimensions of religiosity. We find that general and impulsive risk preferences do not explain gender differences in religiosity, whereas sensation-seeking risk preference makes the gender gap in self-assessed religiousness and church attendance insignificant, but not belief in God, prayer, or importance of religion. Genetic risk preferences do not remove any of the gender gaps in religiosity, suggesting that the causal order is not from risk preference to religiosity. Evidence suggests that risk preferences are not a strong predictor for gender differences in religiosity.     

Go big or go home: Risk seeking for experiential choices

In decision making under risk, do consumers evaluate intangible, experiential options in a choice set in the same way they evaluate tangible, material options? Prior research on prospect theory, typically using either monetary or material objects as choice options, demonstrates that consumers are risk averse for choices involving gains, with a fairly robust tendency to favor a more certain outcome even when that outcome is less desirable. The present research focuses on decision making under risk for experiential options (from movies to concert tickets to hotel stays)—identifying choices between experiential options as a realm in which prospect theory's pattern of risk aversion is weakened and sometimes reversed. Across six studies, this research demonstrates that consumers are more risk seeking for experiential choices and thus more likely to prefer more desirable options, even options that are less certain. Further, the stronger personal connection fostered by experiential (vs. material) choice options mediates risk‐seeking preferences. This work demonstrates a moderator for prospect theory and investigates the tendency toward increased risk seeking among experiential options, in this paper termed a “go big or go home” strategy. Conversely, consistent risk aversion is evidenced for choices involving material options (from clothing to accessories and furniture).     

澳门人少涉赌是规避风险还是规避后悔？

是风险规避还是后悔规避左右人们的冒险行为？基于风险行为跨领域特殊性,本研究假设：决策者是规避风险还是规避后悔具有领域特异性。本研究选取有涉赌经验的澳门居民为样本,以其参与13种博彩的次数为指标考察其真实风险行为。结果验证了上述假设,风险规避说或后悔规避说都不能单独解释个体的风险倾向,个体是风险规避、后悔规避,或二者皆有,取决于其所处的具体风险情境类别。该发现有助于加深对风险行为特征的认识,亦可为预防及应对问题赌博提供启发和指导。     

Loss aversion and perceptual risk aversion

We prove that, in cumulative prospect theory, the weak loss aversion for S-shaped value functions is equivalent to a notion of risk aversion that we define from the perceptual point of view. No additional assumption or condition on the probability distortion is needed. It is demonstrated that a power S-shaped value function does not satisfy weak loss aversion, i.e., a decision maker is risk seeking with respect to some mixed sign lotteries.     

Tonic Activity Level in the Right Prefrontal Cortex Predicts Individuals' Risk Taking

ABSTRACT— Human risk taking is characterized by a large amount of individual heterogeneity. In this study, we applied resting-state electroencephalography, which captures stable individual differences in neural activity, before subjects performed a risk-taking task. Using a source-localization technique, we found that the baseline cortical activity in the right prefrontal cortex predicts individual risk-taking behavior. Individuals with higher baseline cortical activity in this brain area display more risk aversion than do other individuals. This finding demonstrates that neural characteristics that are stable over time can predict a highly complex behavior such as risk-taking behavior and furthermore suggests that hypoactivity in the right prefrontal cortex might serve as a dispositional indicator of lower regulatory abilities, which is expressed in greater risk-taking behavior.     

Losses Induce Consistency in Risk Taking Even Without Loss Aversion

It is posited that because of the attentional effect of losses, individuals would show more behavioral consistency in risk‐taking tasks with losses, even in the absence of loss aversion. In two studies, the consistency of risky choices across different experience‐based tasks was evaluated for gain, loss, and mixed (gain loss) tasks. In both studies, losses facilitated the consistency across tasks: the correlation between risk‐taking choices in different tasks increased when the tasks involved frequent losses. Study 2 also showed a positive effect of losses on temporal consistency. Losses increased the correlation between risk‐taking levels across two sessions that were 45 days apart. Also in Study 2, losses induced consistency between experiential risk‐taking choices and self‐reported ratings of risky behavior. In both studies, the positive effect of losses on consistency was observed even when the average participant did not exhibit loss aversion. Taken together, the results indicate that losses increase the consistency of risk‐taking behavior and suggest that this is due to the effect of losses on attention. Copyright © 2011 John Wiley & Sons, Ltd.     

Moderating Loss Aversion: Loss Aversion Has Moderators,But Reports of its Death are Greatly Exaggerated

Loss aversion, the principle that losses impact decision making more than equivalent gains, is a fundamental idea in consumer behavior and decision making, though its existence has recently been called into question. Across five unique samples (N_total = 17,720), we tested several moderators of loss aversion, which supported a preference construction account. Across studies, more domain knowledge and experience were associated with lower loss aversion, though people of all knowledge and experience levels were loss averse. Among car buyers, those who knew more about a particular car attribute (e.g., fuel economy) were less loss averse for that attribute but not other attributes (e.g., comfort), consistent with the idea that people with less attribute knowledge are more likely to construct preferences, thereby increasing loss aversion. Additionally, older consumers were more loss averse across different loss aversion measures and studies. We discuss implications for several accounts of loss aversion, including accounts rooted in status quo bias, emotion, or ownership. In addition to discovering loss aversion moderators, we cast doubt on recent claims that loss aversion is a fallacy or is fully explained by status quo bias, risk aversion, or the educated laboratory samples often used to study loss aversion.     

不同自尊者在赌博情境下的风险规避行为

为了考察不同自尊水平的个体在赌博情境下的风险规避行为,263名大学生被试同时完成外显Rosenberg量表、内隐联想测验和21点赌博游戏。实验结果发现,(1)随着风险的增加,所有被试都表现出风险规避;(2)在高外显自尊水平的个体中,低内隐自尊水平个体比高内隐自尊水平个体表现出更多的风险规避行为;在低内隐自尊的个体中,高外显自尊个体比低外显自尊个体表现出更多的风险规避行为。风险规避行为间接地反映出个体的防御倾向,结果提示,在风险情境中,高外显低内隐自尊个体表现出较高的自我防御倾向。     

The Effects of Framing, Reflection, Probability, and Payoff on Risk Preference in Choice Tasks

A meta-analysis of Asian-disease-like studies is presented to identify the factors which determine risk preference. First the confoundings between probability levels, payoffs, and framing conditions are clarified in a task analysis. Then the role of framing, reflection, probability, type, and size of payoff is evaluated in a meta-analysis. It is shown that bidirectional framing effects exist for gains and for losses. Presenting outcomes as gains tends to induce risk aversion, while presenting outcomes as losses tends to induce risk seeking. Risk preference is also shown to depend on the size of the payoffs, on the probability levels, and on the type of good at stake (money/property vs human lives). In general, higher payoffs lead to increasing risk aversion. Higher probabilities lead to increasing risk aversion for gains and to increasing risk seeking for losses. These findings are confirmed by a subsequent empirical test. Shortcomings of existing formal theories, such as prospect theory, cumulative prospect theory, venture theory, and Markowitz's utility theory, are identified. It is shown that it is not probabilities or payoffs, but the framing condition, which explains most variance. These findings are interpreted as showing that no linear combination of formally relevant predictors is sufficient to capture the essence of the framing phenomenon.     

Continuance commitment and turnover: Examining the moderating role of negative affectivity and risk aversion

This paper examines the moderating role of negative affectivity and risk aversion in the relationships of two bases of continuance organizational commitment (continuance–sacrifices and continuance–alternatives) to turnover, within a stress–coping perspective. More specifically, we propose that (a) the perspective of leaving is a source of stress for those who stay due to the fear of losing valued advantages (i.e. high continuance–sacrifices commitment) and (b) staying is perceived to be stressful by individuals who remain based on a lack of employment alternatives (i.e. high continuance–alternatives commitment). We argue that these perceptions are magnified by negative affectivity and risk aversion, resulting in individuals who present these traits to use avoidance–withdrawal strategies in coping with these situations. Accordingly, based on a sample of 509 human resource management professionals, we found (a) negative affectivity and risk aversion to strengthen the negative relationship of continuance–sacrifices commitment to turnover and (b) continuance–alternatives commitment to relate positively to turnover among individuals with high negative affectivity. We discuss the implications of these findings for our understanding of how commitment mindsets and personality traits affect turnover decisions.     

Decision making in the Balloon Analogue Risk Task (BART): Anterior cingulate cortex signals loss aversion but not the infrequency of risky choices

The inferior frontal gyrus/anterior insula (IFG/AI) and anterior cingulate cortex (ACC) are key regions involved in risk appraisal during decision making, but accounts of how these regions contribute to decision making under risk remain contested. To help clarify the roles of these and other related regions, we used a modified version of the Balloon Analogue Risk Task (Lejuez et al., Journal of Experimental Psychology: Applied, 8, 75-84, 2002) to distinguish between decision-making and feedback-related processes when participants decided to pursue a gain as the probability of loss increased parametrically. Specifically, we set out to test whether the ACC and IFG/AI regions correspond to loss aversion at the time of decision making in a way that is not confounded with either reward-seeking or infrequency effects. When participants chose to discontinue inflating the balloon (win option), we observed greater ACC and mainly bilateral IFG/AI activity at the time of decision as the probability of explosion increased, consistent with increased loss aversion but inconsistent with an infrequency effect. In contrast, we found robust vmPFC activity when participants chose to continue inflating the balloon (risky option), consistent with reward seeking. However, in the cingulate and in mainly bilateral IFG regions, blood-oxygenation-level-dependent activation decreased when participants chose to inflate the balloon as the probability of explosion increased, findings that are consistent with a reduced loss aversion signal. Our results highlight the existence of distinct reward-seeking and loss-averse signals during decision making, as well as the importance of distinguishing between decision and feedback signals.     

Lay Personality Theories in Interactive Decisions: Strongly Held,Weakly Supported

In interactive decisions, cues to what others will do are important in forming a strategy. Information about others' personalities appears to be potentially valuable for this purpose. We report a series of four studies examining how information about another actor's personality influences people's own choices in interactive decisions. The studies found widespread beliefs that others' personality characteristics are strongly predictive both of broad classes of decision behavior (competition/cooperation, risk‐seeking/risk‐aversion) (Study 1) and of specific choices (Study 2) in single‐agent settings. These beliefs extended to predicting others' choices in interactive decisions (Study 3) and to shaping the predictor's own decisions in interactive play in Chicken and Assurance games (Study 4). Overall, we found extensive evidence that laypeople believe that the personality traits we selected (angry‐hostility, anxiety, assertiveness, excitement‐seeking, and warmth) have substantial effects on behavior in interactive decisions and they act on those beliefs when making their own decisions. The empirical evidence supporting the predictive validity of these traits was, however, quite weak. Copyright © 2014 John Wiley & Sons, Ltd.     

The behavioural components of risk aversion

There have been few theoretical investigations of risk attitude within Cumulative Prospect Theory (CPT). Unlike expected utility theory, in CPT risk attitude is affected by loss aversion and decision weight distortions as well as utility curvature for both gains and losses. We introduce two variants of the risk premium—the total risk premium relative to expected value, and the behavioural risk premium relative to the imputed behavioural expected value. Approximate solutions for each using Pratt's [(1964). Risk aversion in the small and in the large. Econometrica, 32, 122-136] methodology show that the CPT risk premium is composed of two components: the first, analogous to the Pratt-Arrow coefficient of risk aversion, governs the contribution of the curvature of the value function to risk aversion; the second governs the first-order contribution of loss aversion. Both of these terms are made more complex by the introduction of decision weights. We analyse the contribution of each component and provide sufficient conditions to ensure risk aversion in CPT.     

不同风险态度大学生职业决策的线索偏好及信息搜索特点

探讨不同风险态度的大学生在职业决策中的线索偏好及信息搜索特点。以大学生为被试,以Weber的风险态度问卷为工具,筛选出风险寻求大学生26名,风险规避大学生23名,采用信息板技术进行模拟职业决策研究。结果发现：（1）风险寻求和风险规避大学生在职业决策中点击次数最多的职业属性均依次是工资、发展空间和兴趣;（2）在信息板的点击次数上,风险寻求被试比风险规避被试更多;在搜索模式上,风险寻求组被试和风险规避组的得分均为正值,但风险寻求组被试的得分显著高于风险规避组。因此,大学生职业决策中偏好的线索主要是工资、发展空间和兴趣;风险寻求者的信息搜索模式与风险规避者不同,风险寻求者更倾向于以选项为基础的搜索模式。