Risk Attitudes in the Telecommunications Industry

Abstract

It has been suggested in the economics literature that strongly risk-averse individuals may tend to gravitate toward large monopolistic firms rather than work for more competitive companies. In this article we provide results of an experiment designed to test this hypothesis. Operating managers from both regulated telecommunicationsfirms and a broad cross section of unregulated industrial and service corporations were placed in the same controlled decision context to examine whether there are any systematic differences between telecommunications managers and their counterparts in nonregulated companies in their risk attitude toward losses.