How people respond to risk after being exposed to the risk of loss: An experimental study

Zhiqiang Dong, Yuchen Guo and Jun Zhao

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2022, vol. 97, issue C

Abstract: This study examines the effect of prior risk exposure on subsequent risk-taking behaviors. We perform laboratory-based experiments to distinguish the effect of the risk environment per se from that of the realized outcome of events. Unlike He and Hong (2018), who focus on the gain domain, we investigate people's risk-taking behaviors in both the loss and gain domain after being exposed to the risk of loss. Results indicate that prior exposure to high risk of loss leads to increased risk-seeking in the loss domain, but has no effect on subsequent risk-taking behaviors in the gain domain.

Keywords: Prior risk exposure; Risk-taking behavior; Loss domain; Gain domain; Risk environment (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:97:y:2022:i:c:s2214804322000210

DOI: 10.1016/j.socec.2022.101845

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