In the wake of the current financial crises triggered by risky mortgage-backed securities, the question of ethics and risk-taking is once again at the front and center for both practitioners and academics. Although risk-taking is considered an integral part of strategic decision-making, sometimes firms could be propelled to take risks driven by reasons other than calculated strategic choices. The authors argue that a firm's risk-taking propensity is impacted by its ethical climate (egoistic or benevolent) (...) and its emphasis on output control to manage its marketing function. The firm's long-term orientation is argued to moderate the control–risk propensity relationship. The authors also extend research on risk and performance and argue that the association of risk-taking propensity and firm performance is contingent on the ownership (publicly traded versus privately held) structure of the firm. Based on survey data from a sample of manufacturing industries in the United States, the results show significant impact of ethical climate and marketing output control on a firm's risk-taking propensity; also risk-taking propensity shows a stronger association with firm performance in privately held firms than in publicly traded firms. (shrink)

This research examined whether youth's forecasted risk taking is best predicted by a compensatory (namely, subjective expected utility) or non-compensatory (e.g., single-factor) model. Ninety youth assessed the importance of perceived benefits, importance of perceived drawbacks, subjective probability of benefits, and subjective probability of drawbacks for 16 risky behaviors clustered evenly into recreational and health/safety domains. In both domains, there was strong support for a noncompensatory model in which only the perceived importance of the benefits of engaging in a (...) risky behavior predicted youths' forecasted engagement in risky behavior. The study overcomes earlier methodological weaknesses by fully decomposing participants' assessments into importance and probability aspects for both benefits and drawbacks. As such, the findings provide clear evidence in support of a boundedrationality perspective on youth decision making regarding risk taking. (shrink)

Are risk-takers more likely to engage in unethical behaviors? We examined the relationship between risk-taking propensity and cheating in two experimental studies. In Study 1, we examined the relationship between subjects’ risk-taking propensity and their actual self-serving dishonesty using a gambling-like task. The results suggested that risk-taking propensity, measured using a behavioral approach, was positively correlated with actual self-serving dishonest behavior. In Study 2, we measured participants’ performances using a matrices test and found (...) that the positive correlation still held. We found that participants with high risk-taking propensity reported a lower perceived probability of being detected, which might drive their dishonest behavior. (shrink)

When you are indifferent between two options, it’s rationally permissible to take either. One way to decide between two such options is to flip a fair coin, taking one option if it lands heads and the other if it lands tails. Is it rationally permissible to employ such a tie-breaking procedure? Intuitively, yes. However, if you are genuinely risk-averse—in particular, if you adhere to risk-weighted expected utility theory (Buchak in Risk and rationality, Oxford University Press, 2013) (...) and have a strictly convex risk-function—the answer will often be no: the REU of deciding by coin-flip will be lower than the REU of choosing one of the options outright (so long as at least one of the options is a nondegenerate gamble). This turns out to be a significant worry for risk-weighted expected utility theory. I argue that it adds real bite to established worries about diachronic consistency afflicting views, like risk-weighted expected utility theory, that violate Independence. And that, while these worries might be surmountable, surmounting them comes at a price. (shrink)

Much research has explored the physiological, energetic, environmental, and psychological factors that influence pacing in endurance events. Although this research has generally neglected the role of psychological variation across individuals, recent studies have hinted at its importance. Here we conducted an online survey of over 1,300 marathon runners, testing whether any of five psychological constructs—competitiveness, goal achievement, risk taking in pace (RTP), domain-specific risk taking, and willingness to suffer in the marathon—predicted slowing in runners’ most recent (...) marathons. Analyses revealed that RTP—the extent to which runners agreed that they began the marathon at a pace that was so fast that it would jeopardize their capacity to maintain this pace throughout the event—was a robust predictor of marathon slowing. RTP proved a substantial predictor even in regression models controlling for the other psychological constructs, training, experience, and other known pacing correlates. This result suggests that marathoners consider trade-offs when making pacing decisions, and that individuals vary in their pacing decision making. (shrink)

With a few exceptions, much of epistemology in the last century has been dominated by discussions centered on knowledge, and in particular propositional knowledge (along with associated concepts such as justification, the reliability of cognitive processes, etc.). Recently, attention has been given to other cognitive states such as understanding and wisdom, due in some part to the resurgence of theorizing about intellectual virtues. As with typical epistemic concepts such as justification and knowledge, offering an analysis of wisdom has been difficult. (...) In this paper, I critique a recent attempt to analyze wisdom as risk-taking, and after gleaning from the insights of Thomas Aquinas, I defend a particular version of the wisdom-as-understanding approach. (shrink)

We examine the implications of the US government’s too-big-to-fail policy as it has been applied to banks. Using alternative measures of risk, we compare the risk-taking behavior of 11 TBTF banks, identified by the Comptroller of the Currency in 1984, to a number of non-TBTF banks. We provide both theory and new empirical evidence to support our argument that the TBTF policy leads management to significantly increase risk-taking, with no corresponding increase in performance. While prior (...) studies have considered the effects of the TBTF policy on limited, but risk-related aspects of bank behavior, such as the cost of funds, our study provides direct evidence about the risk-taking behavior associated with the TBTF policy. Our study has important implications for the current political debate regarding the too-big-to-fail policy. (shrink)

Decisions regarding clinical procedures or research participation typically require the informed consent of individuals. When individuals are unable to give consent, the informed permission of a legally authorized representative or surrogate is required. Although many proposed procedures are aimed primarily at benefiting the individual, some are not. I argue that, particularly when individuals are asked to assume risks primarily or exclusively for the benefit of others, family members ought to be engaged in the informed consent process. Examples of procedures in (...) which individuals are asked to assume risks primarily or exclusively for the benefit of others include living organ donation and research participation. (shrink)

Risk Taking in Higher Education includes authors from numerous academic disciplines to emphasize both the importance of risk-taking across higher education and to highlight the varied approaches to incorporate risk-taking into classroom practices.

Research in empirical moral psychology has consistently found negative correlations between morality and both risk-taking, as well as psychopathic tendencies. However, prior research did not sufficiently explore intervening or moderating factors. Additionally, prior measures of moral preference have a pronounced lack of ecological validity. This study seeks to address these two gaps in the literature. First, this study used Preference for Precepts Implied in Moral Theories, which offers a novel, more nuanced and ecologically valid measure of moral judgment. (...) Second, the current study examined if risk taking moderates the relationships between psychopathic tendencies and moral judgment. Results indicated that models which incorporated risk-taking as a moderator between psychopathic tendencies and moral judgment were a better fit to the data than those that incorporated psychopathic tendencies and risk-taking as exogenous variables, suggesting that the association between psychopathic tendencies and moral judgment is influenced by level of risk-taking. Therefore, future research investigating linkages between psychopathic tendencies and moral precepts may do well to incorporate risk-taking and risky behaviors to further strengthen the understanding of moral judgment in these individuals. (shrink)

In two pre-registered online studies during the COVID-19 pandemic and the early 2020 lockdown (one of which with a UK representative sample) we elicit risk-tolerance for 1,254 UK residents using four of the most widely applied risk-taking tasks in behavioral economics and psychology. Specifically, participants completed the incentive-compatible Balloon Analog Risk Task (BART) and the Binswanger-Eckel-Grossman (BEG) multiple lotteries task, as well as the Domain-Specific Risk-Taking Task (DOSPERT) and the self-reported questions for risk- (...) class='Hi'>taking used in the German Socio-economic Panel (SOEP) study. In addition, participants in the UK representative sample answered a range of questions about COVID-19-related risky behaviors selected from the UCL COVID-19 Social Survey and the ICL-YouGov survey on COVID-19 behaviors. Consistently with pre-COVID-19 times, we find that risk tolerance during the UK lockdown (i) was higher in men than in women and (ii) decreased with age. Undocumented in pre-COVID-19 times, we find some evidence for healthier participants displaying significantly higher risk-tolerance for self-reported risk measures. We find no systematic nor robust patterns of association between the COVID-19 risky behaviors and the four risk-taking tasks in our study. Moreover, we find no evidence in support of the so-called “risk compensation” hypothesis. If anything, it appears that participants who took greater risk in real-life COVID-19-relevant risky behaviors (e.g., isolating or taking precautions) also exhibited higher risk-tolerance in our experimental and self-reported risk-taking measures. (shrink)

Previous evidence from developed nations has suggested that more trusting individuals are more likely to take financial risks, such as investing in the stock market. Previous studies have found that Chinese citizens have particularly high generalized trust and are more risk-seeking in investment compared with Americans, which makes China an interesting case. The current study examines the relation between generalized trust and stock market participation in China at both a contextual and individual level. Across provinces, a lower level of (...) generalized trust was associated with stock market participation. For example, the stock market participation was four times higher in provinces with the lowest level of perceived fairness than in provinces with the highest level of perceived fairness. The contextual effects of less generalized trust suggest an association between risk- taking behaviors and societal level inequality. At the individual level, trust of strangers was associated with risk preference in highly educated and wealthy people but its effect on risk behaviors was not clear. The findings suggest that trust may affect financial risk-taking behavior at different levels through different pathways, and that cultural differences in understanding of trust also need to be considered. (shrink)

Figner, Mackinlay, Wilkening, and Weber (2009) developed the Columbia Card Task (CCT) to measure risk-taking attitudes. This tool consists of two versions: in the COLD version the decision maker needs to state in advance how many cards (out of 32) they want to turn over (so called static risk taking), in the HOT version they have the possibility of turning over all 32 cards one-by-one until they decide to finish (dynamic risk taking). We argue (...) that the HOT version confounds an individual’s willingness to accept risk with their beliefs in trend continuation vs. trend reversal in a prognostic task. In two experimental studies we show that people believing in trend continuation (momentum subjects) turn over more cards than those believing in trend reversal (contrarians) in the HOT version of the task. However, this is not the case in the COLD version. Thus, we provide evidence that, when considered as a dynamic risk propensity measure, the number of turned over cards in the HOT version of the CCT is a contaminated measure and reflects two phenomena: (1) risk preference and (2) the decision-maker’s belief in trend continuation. We speculate that other dynamic risk taking measures can also be biased by a momentum strategy. (shrink)

Campbell's analysis of the evolution of human sex differences to include selection pressures on the female is generally welcomed. This commentary raises some specific issues about the evidence cited: the impact of paternal death on survival prospects; a possible mechanism underlying a sex difference in fear; the selective advantage of dominance hierarchies; and the absence of evidence that testosterone causes human aggression.

A social planner who evaluates risky public policies in light of the other risks with which their society will be faced should judge favourably some such policies even though they would deem them too risky when considered in isolation. I suggest that a longtermist would—or at least should—evaluate risky polices in light of their prediction about future risks; hence, longtermism supports social risk-taking. I consider two formal versions of this argument, discuss the conditions needed for the argument to (...) be valid, and briefly compare these conditions to some risky policy options with which actual public decision-makers are faced. (shrink)

This paper studies the effects of social comparison on risk taking behavior. In our theoretical framework, decision makers evaluate the consequences of their choices relative to both their own and their peers’ conditions. We test experimentally whether the position in the social ranking affects risk attitudes. Subjects interact in a simulated workplace environment where they perform a work task, receive possibly different wages, and then undertake a risky decision that may produce an extra gain. We find that (...) social comparison matters for risk attitudes. Subjects are more risk averse in the presence of small social gain than social loss. In addition, risk aversion is decreasing in the size of the social gain. (shrink)

There is a paucity of experimental data addressing how peers influence adolescent risk-taking. Here, we examined peer effects on risky decision-making in adults and adolescents using a virtual social context that enabled experimental control over the peer “interactions”. 40 adolescents (age 11-18) and 28 adults (age 20-38) completed a risk-taking (Wheel of Fortune) task under 4 conditions: in private; while being observed by (fictitious) peers; and after receiving ‘risky’ or ‘safe’ advice from the peers. For high- (...) class='Hi'>risk gambles (but not medium-risk or even gambles), adolescents made more risky decisions under peer observation than adults. Adolescents, but not adults, tended to resist ‘safe’ advice for high-risk gambles. Although both groups tended to follow ‘risky’ advice for high-risk gambles, adults did so more than adolescents. These findings highlight the importance of distinguishing between the effects of peer observation and peer advice on risky decision-making. (shrink)

Holistic thinking involves four subconstructs: causality, contradiction, attention to the whole, and change. This holistic perspective varies across Eastern–Western cultures and genders. We theorize that holistic thinking reduces three domain-specific risk-taking behavioral intentions (ethical, financial, and health/safety) directly and indirectly through enhanced risk-taking attitudes. Our formative theoretical model treats the four subconstructs of holistic thinking as yoked antecedents and frames it in a proximal context of causes and consequences. We simultaneously explore the direct and indirect paths (...) and test our model across cultures, genders, and the combination of the two. For the entire sample (N = 531), holistic thinking negatively relates to risk intentions via enhanced risk perceptions. Across cultures, the indirect paths prevail among Chinese people (n = 284), and both direct and indirect paths triumph for Americans (n = 247). Across genders, the indirect paths exist for females, whereas the negative direct path (risk-raking attitudes → behavioral intentions) succeeds for males. Across cultures and genders, holistic thinking negatively relates to American males’ ethical risks the most but Chinese males’ financial risks the least. Risk-taking perceptions are negatively related to Chinese males’ ethical risks the most, but Chinese people’s (males/females) financial risks the least. Causality and change are vital for all contexts, attention to the whole for all males and Chinese males, and contradiction for Americans and all females. Holistic thinking has limits and is less robust than risk-taking perceptions in reducing risky behavioral intentions. Our practical implications help people make ethical, healthy, and wealthy decisions. (shrink)

This study examined the effects of mood and risk-taking on divergent and convergent thinking using a Q-learning computation model. The results revealed that while mood was not significantly related to divergent or convergent thinking (as creative thinking types), risk-taking exerted positive effects on divergent thinking in the face of negative rewards. The results were consistent with the representational change theory in insight problem solving. Although this theory accounts directly for insight, the underlying idea of going beyond (...) current contexts and implicit constrains could be applied to creative thinking as well. The results indeed accounted for the relevance of this theory to divergent thinking. The current study is one of the first empirical studies simultaneously examining the role of mood and risk-taking in creativity. In particular, no related studies exist that took a computational approach to estimate the relevant parameters in the framework of dynamic optimization. Our Q learning model enables to distinguish and identify the different roles of mood and risk-taking in updatingQvalues and making decisions. (shrink)

Athletes who wish to compete in spite of high risk of injury can prove a challenge for sports doctors. Overriding an athlete's choices could be considered to be unnecessarily overbearing or paternalistic. However simply accepting all risk-taking as the voluntary choice of an individual fails to acknowledge the context of high-level sport and the circumstances in which an athlete may be being coerced or in some other way be making a less than voluntary choice. Restricting the voluntary (...) choices of an athlete may still be possible but under very limited circumstances. This article explores the ways a sports doctor might respond in ensuring a choice is indeed voluntary and, if so, under what circumstances limits might be placed. Responding to such risk-taking by, for example, limiting the actions of an athlete or assisting them to compete, involves attempting to balance the athlete's aims against some set of ideals of good health or medical ends. (shrink)

Risk-taking behaviours often reflect ambivalent ways of calling for the help of one’s close friends and family – those who count. It is an ultimate means of finding meaning and a system of values; and it is a sign of the adolescent’s active resistance and his attempts to find his place in the world again. It contrasts with the far more insidious risk of depression and the radical collapse of meaning. In spite of the suffering it engenders, (...) risk-taking nevertheless has a positive side, fostering independence in adolescents and a search for reference points, it leads to a better self-image and is a means of developing one’s identity. It is nonetheless painful in terms of its possible repercussions: injuries, death or addiction. But let us not forget that the suffering is upstream, perpetuated by a complex relation between a society, a family structure and a life history. Paradoxically, for some young people who are suffering, the risk is rather that they will remain immured in their world-weariness, with a potentially radical outcome (i.e. suicide). The turbulence caused by risk-taking behaviours illustrates a determination to be rid of one’s suffering and to fight on so that life can, at last, be lived. (shrink)

In contrast to the assumptions of standard economic theory, recent experimental evidence shows that the income of peers has a systematic impact on observed degrees of risk aversion. This paper reports the findings of two experiments examining the impact of income inequality on risk preferences and whether the knowledge of inequality mediates the decisions. In Experiment 1, participants who were recruited for a real-effort task were paid either a low wage or a high wage. Half of the participants (...) were aware of the income inequality, while the other half were not. After completing their task, they were invited to invest a part of their salary in a risky asset. In Experiment 2, we replicated the same experiment in the laboratory with windfall endowments to test the consistency of results in the laboratory settings. The results of the first experiment show that high-wage subjects take higher risks than low-wage participants do if they are aware of the inequality in wages. This finding supports the idea that income comparisons shape risky decisions. In Experiment 2, on the other hand, we did not observe any significant differences in decisions. This may suggest that the income comparison is sensitive to house-money effect. (shrink)

Risk-taking behavior is particularly widespread during adolescence, and negatively impacts the healthy growth and social adaptation of adolescents. Utilizing problem-behavior theory and the family stress model, the current study examined the relationship between socioeconomic status and adolescents’ risk-taking behavior, as well as the mediating role of psychological capital and self-control. A total of 1,156 Chinese adolescent students completed a series of questionnaires anonymously. The results showed that: Socioeconomic status was negatively correlated with adolescents’ risk-taking (...) behavior; Both psychological capital and self-control mediated the relationship between SES and adolescents’ risk-taking behavior independently; and Psychological capital and self-control also mediated the relationship between SES and the risk-taking behavior of adolescents sequentially. This study reveals the internal mechanism of risk-taking behavior during adolescence and provides theoretical support and empirical evidence for preventing and reducing such behavior in this age group. (shrink)

This paper analyzes nonviolent resistance and direct action, as seen by its practitioners and theoreticians, from the standpoint of trust and risk-taking. After an examination of the nature of trust, the author indicates how it can illuminate what selected figures such as Gandhi and King have claimed about nonviolence. He offers this analysis not as a defense but as a way of understanding nonviolence that can serve as a starting point for further discussion.

Discussions of risk taking in the modern business organization frequently focus upon the behavior of individual moral agents. Here I attempt to identify some of the complexities of risk taking when it is a group phenomenon and to do so in such a way as to shed some light upon the ethics of group risk taking in business organizations.

We use variation in corruption convictions across judicial districts in the US to examine the relationship between political corruption and risk-taking of public firms. Firms headquartered in regions with high levels of political corruption have lower total risk and lower idiosyncratic risk on average. Further analysis shows that corruption tends to encourage firms to pursue risk-decreasing investments, lower the riskiness of their operations, and decrease asset liquidity. While managerial ownership is intended to align the interests (...) of managers and shareholders, the presence of corruption appears to encourage undiversified managers to decrease risk-taking. Our evidence is consistent with agency theory and the asset-shielding argument that political corruption discourages managers from taking risks that expose firms to expropriation by politicians, resulting in suboptimal corporate policies. (shrink)

The present study investigated school counselors’ ratings of the importance of factors in deciding to report adolescent risk-taking behaviors to parents. Turkish school counselors were surveyed. Differences based on gender, years of experience, level of education, attendance of a counseling ethics course, and geographic region were investigated. Mann-Whitney U and Kruskal Wallis tests were used in data analysis. Protecting the student was the highest rated factor. Women and those who took an ethics course rated protecting the student higher (...) than others. Implications for counseling ethics training are discussed, and recommendations for future research are outlined. (shrink)