Willingness to Take Risk: The Role of Risk Conception and Optimism

Thomas Dohmen, Simone Quercia and Jana Willrodt

No 1026, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: We show that the disposition to focus on favorable or unfavorable outcomes of risky situations affects willingness to take risk as measured by the general risk question. We demonstrate that this disposition, which we call risk conception, is strongly associated with optimism, a stable facet of personality, and that it predicts real-life risk taking. The general risk question captures this disposition alongside pure risk preference. This likely contributes to the predictive power of the general risk question across domains. Our results also rationalize why risk taking is related to optimism.

Keywords: Risk taking behavior; optimism; preference measure; risk conception (search for similar items in EconPapers)
JEL-codes: C91 D01 D81 D91 (search for similar items in EconPapers)
Pages: 50 p.
Date: 2019
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hpe, nep-rmg and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Willingness to take risk: The role of risk conception and optimism (2018)
Working Paper: Willingness to take risk: The role of risk conception and optimism (2018)
Working Paper: Willingness to Take Risk: The Role of Risk Conception and Optimism (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp1026

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