Willingness to take risk: The role of risk conception and optimism

Thomas Dohmen, Simone Quercia and Jana Willrodt ()
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Jana Willrodt: University of Duesseldorf

No 2018-056, Working Papers from Human Capital and Economic Opportunity Working Group

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 enlightens why the general risk question is a better predictor of behavior under risk across different domains than measures of pure risk preference. Our results also rationalize why risk taking is related to optimism.

Keywords: risk; optimism; behavior (search for similar items in EconPapers)
JEL-codes: C91 D01 D81 D91 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Note: MIP, IP
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Dohmen ... ngness-take-risk.pdf First version, June 1, 2018 (application/pdf)

Related works:
Working Paper: Willingness to Take Risk: The Role of Risk Conception and Optimism (2019)
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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