Judging risk behaviour and risk preference: The role of the evaluative connotation of risk terms

Abstract

AbstractTwo experiments investigate the impact of the evaluative connotation of risk terms on the judgment of risk behaviour and on risk preference. In the first experiment we focus on (1) the evaluation congruence of the risk terms with a general risk norm and (2) with subjects' individual risk preference, and its effects on the extremity of judgments of risk behaviour. In the second experiment we address (3) the effects of evaluative connotation of risk terms on risk preference.In the first experiment subjects were presented with four decision problems, each with a risky and a cautious decision option, and were required to judge options. Results showed that the judged discrepancy between the risky and cautious option was larger on scales which were evaluatively congruent with the general risk norm for that specific decision problem or with subjects' individual preference. More specificly, in decision problems for which there was considerable consensus about the risk‐norm judgments were more extreme on scales which were congruent with the risk norm, in those problems lacking a clear‐cut risk‐norm judgments were more extreme on scales congruent with subjects' individual risk preference.In the second experiment we studied the reverse relation between the evaluative connotation of risk terms and risk preference. This experiment demonstrates that using evaluatively biased risk terms can affect risk preference. Using terms which imply a positive evaluation of risk‐taking and a negative evaluation of risk avoidance led to increased risk preference, and vice versa. Results are discussed in the context of accentuation theory.