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Are public managers more risk averse? Framing effects and status quo bias across the sectors

Sean Nicholson-Crotty, Jill Nicholson-Crotty and Sean Webeck
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Sean Nicholson-Crotty: Indiana University
Jill Nicholson-Crotty: Indiana University
Sean Webeck: Naval Postgraduate School

Journal of Behavioral Public Administration, 2019, vol. 2, issue 1

Abstract: Modern reforms meant to incentivize public managers to be more innovative and accepting of risk are often implicitly based in the longstanding assumption that public employees are more risk averse than their private sector counterparts. We argue, however, that there is more to learn about the degree to which public and private managers differ in terms of risk aversion. In order to address this gap, we field a series of previously validated experiments designed to assess framing effects and status quo bias in a sample of public and private sector managers. Our results indicate that public managers are not more risk averse or anchored to the status quo than their private sector counterparts; in fact, the findings suggest the opposite may be true under some conditions. In addition, our results fail to confirm previous findings in the literature suggesting that public service motivation is associated with risk aversion. We conclude with a discussion of the implications of these results for the study of risky choice in the public sector and for modern public management reforms.

Keywords: Public management; Risk; Framing effects; Status quo bias (search for similar items in EconPapers)
JEL-codes: D91 D81 Z00 D90 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:bpd:articl:v:2:y:2019:i:1:jbpa.21.35

DOI: 10.30636/jbpa.21.35

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