Abstract
The study analyses the susceptibility to risk-taking behaviour in relation to cultural, cognitive and personality traits. For the requirements of the research, undergraduate students with the same major but from two different cultural regions (Poland and the USA) were examined. In order to better understand them, the ten-item personality inventory (TIPI) method – a 10-item measure of the Big-Five personality dimensions – was used. A domain-specific risk-taking (DOSPERT) scale was used to assess risk-taking, while cognitive aspects of behaviour were measured by a cognitive reflection test. It is important to point out that Polish students reported significantly greater proneness to risk-taking than their American counterparts. It was revealed that participants scoring highly in the cognitive reflection test were characterised with lower risk-taking propensity. Consistent with past research, high scores in extraversion and low scores in conscientiousness predicted overall risk-taking behaviour. As follows from the study, men reported significantly greater willingness to take risks than women.
Highlights
IntroductionUnderstanding risk-taking plays a vital role in economics, and is a subject of numerous research studies both in classical and behavioural or cultural domains of economics and finance
Understanding risk-taking plays a vital role in economics, and is a subject of numerous research studies both in classical and behavioural or cultural domains of economics and finance.According to classical understanding, ‘homo economicus’ is generally risk-averse
A domain-specific risk-taking (DOSPERT) scale was used to assess risk-taking, while cognitive aspects of behaviour were measured by a cognitive reflection test
Summary
Understanding risk-taking plays a vital role in economics, and is a subject of numerous research studies both in classical and behavioural or cultural domains of economics and finance. According to classical understanding, ‘homo economicus’ is generally risk-averse. It turned out that risk-aversion is not constant, and it depends on whether the outcome is a possible loss or gain (reflection effect). People tend to avoid risk under the gain domain and tend to seek risk under the loss domain (Kahneman & Tversky, 1979). Decisions often depend on the way the data are presented, that is, whether a possible effect is presented as a loss or as a gain (framing effect)
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