Individual Risk-taking Research Articles

An Examination of Ecological Factors Predicting Depressed Mood Among Adolescents

From a developmental perspective, the increase in depressive symptoms among adolescents over the past decade is of great concern due to the risk of long-term mental health problems extending into adulthood. Informed by the Multicultural Social Justice Framework, we examined multi-level, ecological risk and protective factors of depressive symptoms among adolescents. Data were leveraged from the Florida Youth Substance Abuse Survey ( N = 9,717) to examine adolescent reported depressive symptoms, individual risk-taking, family factors, school engagement and involvement, community disorganization and safety, and district level factors. We stratified by race to examine differential associations between risk and protective factors and depressive symptoms among Asian, Black, and Latinx youth. Results indicate that individual and family risk and family protection were associated with depressive symptoms. School and community factors were directly related and interacted with individual and family factors, particularly among Black and Latinx youth. Findings imply the need to examine both proximal and systemic factors.

Physiology of Risk-Taking and Risk Management in Realistic Decision-Making Scenarios.

Decisions under risk are a particular case of decisional skills taking place in complex and mostly unpredictable situations, where affective connotation of deciding is highly relevant. We aimed at investigating decisional processes under risk by outlining individual risk-taking (RT) and risk management (RM) attitudes via realistic decision-making and, in keeping with the risk-as-feeling hypothesis, at exploring implicit physiological correlates of such processes. 35 participants were presented with realistic situations where they had to make decisions by choosing between alternatives connoted by different levels of riskiness. Concurrently, autonomic physiological activation (cardiovascular and electrodermal activity) was recorded. Data analysis highlighted that: (i) participants showed higher propensity towards risk management than risk-taking; (ii) the propensity towards both risk taking and risk management was significantly determined by physiological markers of autonomic activity; and (iii) risk taking and risk management indices showed associations with different autonomic measures, respectively heart rate and skin conductance metrics.

GROWING AN INFORMAL DIGITAL MICRO-ENTERPRISE: THE ROLE OF INDIVIDUAL ENTREPRENEURIAL ORIENTATION AND SOCIAL CAPITAL

This research examines the effects of individual entrepreneurial orientation (IEO) on informal sector digital micro-enterprise growth in developing countries and the moderating role of networking social capital. The majority of EO research on company growth has focused on registered traditional SMEs and larger enterprises in higher-income markets. A total of 248 informal online micro-enterprises from Senegal were studied. The findings show that IEO has distinct effects on informal digital microbusiness development. Individual risk-taking boosts digital micro-enterprise growth, whereas inventive behaviour hinders it. Proactiveness does not seem to increase growth. Different social capital’s moderating effects on IEO dimensions and online micro-enterprise growth are also found. This study is one of the first to examine individual entrepreneurial behaviour that may lead to the growth of informal digital micro-businesses and the differentiated role of SC. It has also expanded business contextualisation to better comprehend IEO in informal online micro-enterprises outside developed countries.

Bank homogeneity and risk-taking: Evidence from China

Homogeneity is a prominent problem facing China's banking industry, which is essentially a low-level competition lacking core competitiveness and brings challenges to the security and stability of the financial system. We find that homogeneity increases bank risk-taking, and this result is heterogeneous among different bank characteristics. It is further shown that reducing franchise value and increasing liquidity creation are two rational mechanisms through which bank homogeneity increases risk-taking. We also find that homogeneity increases common risk exposure and intensifies competition among banks, and economic policy uncertainty, tight monetary policy, and bank competition will prompt them to take more risks. Overall, our research suggests that in a banking system with restricted business models and strong regulatory constraints, homogeneity fails to achieve risk-sharing but increases individual risk-taking.

Religion, Places of Worship, and Individual Risk-taking in China

Religion, Places of Worship, and Individual Risk-taking in China

Revisiting Reference Groups: Antecedents and Processes of Social Comparison and Peer Aspiration

Reference groups are a central source of feedback and vicarious learning, and an important source of firm heterogeneity. Despite its importance, we have a limited understanding of reference groups and whom do organizations learn from. This symposium centers on the theme of reference groups, focusing on antecedents and processes of reference groups selection and social comparison by organizations. The symposium aims to extend existing research underscoring the importance of reference groups and provide directions for future research. Effect of Reputation on Reference Group Selection: Evidence from a Regression Discontinuity Approach Presenter: John Kim; U. of California, Irvine Evaluator search costs and gender differences in risk-taking in careers Presenter: Hyeun Lee; U. of Toronto Presenter: Anne Bowers; U. of Toronto Riders on the Storm: Individual Risk-Taking and Organizational Resource Disadvantages Presenter: Siddharth Sharma; Indian School of Business Presenter: Thomas P. Moliterno; Vrije U. Amsterdam

Exploring Therapeutic Risk in the Recovery Process of Adolescents at Risk of Self-harm: A Thematic Analysis of Support Staff Perceptions

Background and Objective: The high prevalence of adolescent self-harm within mental health services presents considerable management concerns, exacerbated by a lack of clear evidence regarding therapeutically effective approaches. This shortfall perpetuates traditional risk-averse practice, despite likely inadequacies in mitigating self-harm through failing to address underlying psychological mechanisms. Therapeutic risk, defined as an approach whereby clinicians support individual risk-taking, may be an alternative that yields improved recovery outcomes. However, related research is adult-focused and provides limited detail on its features, practical delivery and impact on recovery. Consequently, the current study explored the experiences of professionals delivering a therapeutic risk ethos, including their conceptualisation of it and its impact on young people. Methods: Semi-structured interviews were conducted with seven mental health support workers employed by a residential healthcare provider, which promotes a therapeutic risk approach. The provider supported service users aged 15 - 20 experiencing complex psychopathology who, following inpatient discharge, presented a high risk of self-harm and suicidality. Interview data was thematically analysed. Discussion and Conclusion: Staff participants provided their understanding of a therapeutic risk approach, suggesting risk is viewed as positive and beneficial to recovery, alongside the promotion of service user freedom and flexible therapeutic risk management. The perceived therapeutic risk incorporates both permission and support, which facilitate the exploration of underlying feelings and alternative actions. Additionally, therapeutic risk promotes positive recovery outcomes due to empowered service users having increased control over their lives. They argued this can reduce psychological distress, encouraging the development of emotional regulation and adaptive coping strategies.

Synchronization in human decision-making

• We report via experiments, theory, and computer simulations, how synchronization can happen in decision making. • Collective risk can be generated in groups of either gender, but happens through different type of individual risk-taking. • Results of relevance to understand risk taking made, in for example, the financial industry (systemic risk) where the decision making is mostly made by men. Just as soldiers crossing a bridge in sync can produce a catastrophic structural failure, we use experiment, theory, and simulation to show how synchronization in human decision-making can lead to extreme outcomes. Individual decision-making and risk-taking are well known to be gender dependent. However, much less is known about the impact of gender on the generation of collective risk through aggregate decision-making, where the decision of one individual can affect the decision-making of other individuals, leading eventually to synchronization of behavior. To study the formation of collective risk as generated by synchronization in human decision-making, we have devised a series of experiments that can be analyzed and understood within a game-theoretical framework. Experiments involve groups of either men or women, and each individual decides to buy or sell a financial asset using information that contains previous price trends and economic news. Risk can be generated collectively through coordination in the aggregate decision-making, which leads to a price formation far from the fundamental value of the asset. Here we show that collective risk can be generated in groups of either gender, but also that the way it is generated happens through a different type of individual risk-taking for groups composed of men and groups composed of women.

Incidental Emotions and Risk-Taking: An Experimental Analysis

In this paper we run a laboratory experiment in order to investigate the impact of incidental emotions on individual risk-taking. In particular, we induce sadness and happiness by means of audiovisual stimuli and compare the subsequent risky choices with the baseline thanks to a between-subjects design. A tweaked version of the Multiple Price List method is used to elicit individual risk preferences in the context of three different lotteries. As main result, the experimental subjects exhibit greater risk aversion under sadness or happiness, than under neutral conditions. Therefore, we explain the fndings through the theory of ego depletion, whereby controlling emotions so as to subsequently process information consumes a limited self-regulatory resource, which is necessary to take risks as well. The outcome is detected in the first lottery but not from the second lottery onwards, probably due to unchecked order effect.

Supplemental Material for Disgust as a Mechanism for Decision Making Under Risk: Illuminating Sex Differences and Individual Risk-Taking Correlates of Disgust Propensity

Supplemental Material for Disgust as a Mechanism for Decision Making Under Risk: Illuminating Sex Differences and Individual Risk-Taking Correlates of Disgust Propensity

Ambiguity and expectation-neglect in dilemmas of interpersonal trust

AbstractRecent research suggests that people discount or neglect expectations of reciprocity in trust dilemmas. We examine the underlying processes and boundary conditions of this effect, finding that expectations have stronger effects on trust when they are made accessible and when they are provided as objective probabilities (Study 1). Objective expectations have stronger effects when they are based on precise, rather than ambiguous, probabilities (Study 2). We also find that trust decisions differ from individual risk-taking decisions: people are more willing to trust, and expectations have stronger effects on trusting behavior (Study 2). These results show that the availability and ambiguity of expectations shape trust decisions, and that people differentially weight expectations in dilemmas of trust and individual risk-taking.

The influence of groups and alcohol consumption on individual risk-taking

BackgroundResearch addressing the influence of alcohol and groups on risky behaviour has yielded contradictory findings regarding the extent to which intoxicated groups exaggerate or minimise risk-taking. Previous work has examined the effect of intoxication on risk-taking focusing on collective group decision-making, and to date the influence of alcohol consumption and groups on individual risk-taking has yet to be explored experimentally. The current study therefore examined the impact of intoxication and groups on individual risk-taking. MethodsIn a mixed design, 99 social drinkers (62 female) attended an experimental session individually (N=48) or in groups of three (N=51). Individuals completed the study in isolation while groups were tested in the same room. Participants completed two behavioural measures of risk-taking: Balloon Analogue Risk Task (BART) and Stoplight Task (SLT), both before and following consumption of an alcoholic (0.6g/kg males, 0.5g/kg females) or a placebo beverage. ResultsThose who participated in groups took significantly more risks in both tasks than those in isolation. Alcohol did not increase risk-taking on either risk-taking tasks. However, those who consumed placebo were significantly less risky on the SLT, compared to baseline. No interactions were found between context and beverage on risk-taking. ConclusionThe findings do not support a combined effect of alcohol and groups on individual risk-taking. Rather, results indicate that risk-taking behaviour is influenced by peer presence regardless of alcohol consumption. Targeting the influence of groups (above those of alcohol) may hold promise for reducing risk-taking behaviours in drinking environments.

Effects of Macroprudential Policy on Systemic Risk and Bank Risk Taking

Using an international sample of 95 banks from 21 European and North American countries spanning from 2008 to 2014, this paper assesses the effectiveness of a large set of general and housing macro-prudential policies in controlling banks’ systemic importance and risk-taking incentives. Empirical findings indicate that tightening the general capital requirements, sector specific capital buffers, along with housing countercyclical capital requirements and Debt-Service-to-Income lending criteria significantly reduce banks’ contribution to systemic risk and their individual risk-taking. A similar effect has been obtained for loosening real estate loans loss provisioning. Furthermore, the nexus between macroprudential policies and banks’ risk is shaped through several channels like bank size, the share of foreign bank assets, banking sector competition and the independence of supervisory authority.

The Effect of Performance Feedback on the Exploration and Exploitation Tradeoff

March (1991) concluded that when organizations seek to balance exploration and exploitation, the choice is primarily driven by learning from performance feedback. This research tests this conclusion of March at the aggregate organizational level. We examine the impact of the performance feedback using textual analysis of quarterly earnings releases. Unexpectedly, we find that better performance is related to a subsequent increase in exploration relative to exploitation. Since prospect theory is based on individual risk-taking, our findings suggest different mechanisms of risk-taking as a response to performance feedback at the aggregate, organizational level. Our research highlights the performance feedback process at the aggregate organizational level as a determinant of the tradeoff between exploration and exploitation.

Risk-Taking in a Post-Pension Society: A Potential Mechanism for Generating Wealth Inequality in 401(k) Retirement Plans

The introduction of direct contribution 401(k) retirement accounts in the late 1970’s brought about an institutional shift in the relationship between private employers and workers with regard to financial risk and decision making involved with retirement savings, which can impact financial well-being in older age. The role of investment uncertainty on individual risk-taking has been documented, however the importance of socioeconomic status on these decisions has been studied far less. This paper identifies and quantifies an unnoticed mechanism for generating potential inequality within 401(k) plans - based on disparities in employee income and how that results in employees self-selecting riskier or less risky portfolios. Lower-income employees, as a whole, allocate to less risky investments than higher-income earners, and interestingly, those with the highest incomes are slightly more risk averse than might be expected. Also surprising is the result that employees in their 20’s are more risk averse than would otherwise be expected, which may be attributed to a low income being a greater predictor of risk aversion than age. These findings have important implications for the lower income segments of the labor force, as well as for social security and retirement planning policy making.

The Dark Knight’s Dystopian Vision: Batman, Risk, and American National Identity

This essay argues that Frank Miller’s Batman: The Dark Knight Returns (1986) and Batman: The Dark Knight Strikes Again (2001-02) are grounded in a specific type of anticipatory consciousness that we read as risk consciousness. With their sustained and systematic confrontation of risk discourses, the two graphic narratives can be seen as key examples of what we call risk fiction, that is fictional engagements with and expressions of global risks that are the products of late modernity. Our focus on risk is based on Ulrich Beck’s articulation of “reflexive modernity” and reveals the specific ways in which Miller’s Dark Knight series signals a transition in American national, racial and gender identities since the 1980s. It is our contention here that Miller’s The Dark Knight Returns begins a deliberate engagement with how the sense of global risk shapes social cohesion at the height of the cold war, and The Dark Knight Strikes Again brings this engagement to the twenty-first century. We identify three levels of risk representation in the two graphic narratives: apocalyptic riskscapes, individual risk-taking as edgework, and the staging of global risk in the media.

Entrepreneurial assets and mindsets

Purpose – Universities provide entrepreneurship-specific education (ESE) to equip students with the entrepreneurial alertness and risk-taking assets required to pursue entrepreneurial careers. Building upon insights from a dynamic view of human capital, the paper explores the linkage between ESE investment, alertness, and risk-taking asset accumulation, and the outcome relating to the intention “to become an entrepreneur” (henceforth termed an “entrepreneurial mindset”). Design/methodology/approach – Survey information from 189 students from three universities in the Ukraine was hand collected. Hierarchical multiple ordinary least squares regression analysis and slope analysis were used to test presented hypotheses. Findings – ESE students reported higher intensity of entrepreneurial mindset. Further, ESE students who accumulated the connection entrepreneurial alertness asset reported higher intensity of entrepreneurial mindset. ESE students were more oriented to higher entrepreneurial mindset when they had accumulated more connection entrepreneurial alertness asset. ESE students who accumulated the risk-taking propensity asset reported lower intensity of entrepreneurial mindset. ESE students were more oriented to higher entrepreneurial mindset when they perceived less risk. Originality/value – The paper makes a novel contribution by considering whether ESE promotes different elements of entrepreneurial alertness and risk-taking assets. Building upon insights from a broader conceptualization of the entrepreneurial alertness asset (Tang et al., 2012), the paper conceptualized for the first time the linkage between three elements of entrepreneurial alertness and student entrepreneurial mindset. Further, the paper conceptualized linkage between two elements of risk-taking relating to risk-taking perception asset and risk-taking propensity asset, and higher intensity of entrepreneurial mindset. Assets relating to entrepreneurial alertness and risk-taking perception need to be honed in transition economy contexts associated with political structures that did not promote individual risk-taking.

Anticipating Early Fatality: Friends’, Schoolmates’ and Individual Perceptions of Fatality on Adolescent Risk Behaviors

Past research indicates that anticipating adverse outcomes, such as early death (fatalism), is associated positively with adolescents' likelihood of engaging in risky behaviors. Health researchers and criminologists have argued that fatalism influences present risk taking in part by informing individuals' motivation for delaying gratification for the promise of future benefits. While past findings highlight the association between the anticipation of early death and a number of developmental outcomes, no known research has assessed the impact of location in a context characterized by high perceptions of fatality. Using data from Add Health and a sample of 9,584 adolescents (51% female and 71% white) nested in 113 schools, our study builds upon prior research by examining the association between friends', school mates', and individual perceptions of early fatality and adolescent risk behaviors. We test whether friends' anticipation of being killed prior to age 21 or location in a school where a high proportion of the student body subscribes to attitudes of high fatality, is associated with risky behaviors. Results indicate that friends' fatalism is positively associated with engaging in violent delinquency, non-violent delinquency, and drug use after controlling for individual covariates and prior individual risk-taking. Although friends' delinquency accounts for much of the effect of friends' fatalism on violence, none of the potential intervening variables fully explain the effect of friends' fatalism on youth involvement in non-violent delinquency and drug use. Our results underscore the importance of friendship contextual effects in shaping adolescent risk-taking behavior and the very serious consequences perceptions of fatality have for adolescents' involvement in delinquency and drug use.

Information Searches Affect Individual Investment Preferences: Testing a Moderating Effect of Income

Risk-taking in investment decision-making is a major means to create individual wealth. Investors search information for risk-reducing strategies in risky investment decision-making. Digital information on financial measures and advice-seeking information are two usual studied variables in information searching. This study extends the information search aspects to discuss heuristics reliance to enrich our understanding of individual risk-taking in investment choices. A test for differences based on income is also conducted. In addition, this article discusses two forms of risky investments, stocks/options investments as well as mutual funds investments. We test our model with a sample of experienced investors by confirmatory factor analysis and hierarchical regression analysis. The results show that heuristics have a strong positive effect on mutual fund investment preferences. An increase of advice-seeking information search significantly increases individual interest in stocks/options investment for high-income investors. Accordingly, implications for financial consultants and ethics issues are discussed as well.

Implementing Better Banking Regulation and Other Standards: Lessons from the Past

Diagnosis of the East Asian/Emerging Market crisis of 1997-1998 suggested that weaknesses in banking regulation and supervision may have contributed to the crisis. The arguments that were advanced for reforms to international banking regulation and supervision in that context may be of relevance in the present. Consideration of the past crises suggested that we are at a point of diminishing returns on additional expenditure of efforts on devising better standards and rules. The difficulties lie in administering the existing rules effectively. Further, the paper argues that improved disclosure and greater transparency do not necessarily eliminate surprises or reduce volatility, since markets adjust to the amount and quality of information in a system and operate on the edge of ignorance, which is the obverse side of the coin of fully discounting all known information. Moreover, information is feedback, which sometimes can be “positive” in nature, meaning it intensifies the event. Accordingly, increased information, being simply intensified feedback, can as easily imply more intense volatility if positive feedback loops exist. In the same vein, increased reliance on capital markets which depend on common information and less reliance on banks which run on private information risks leading to greater correlation of investor reactions and thus to sharper swings and greater short-term volatility. Generally speaking, changing the rules of the game from one crisis episode to another tends to invalidate the experience of the previous episode as a guide to the future. Finally, insofar as non-neutrality towards sources of is built into rules, this shifts the locus of – for example, tighter regulation of financial institutions shifts the action to unregulated markets; this does not eliminate in the economy or to the banks, it just alters the way in which banks wind up being exposed to risk. Avoiding in one area thus may mean backing into elsewhere – a financial market relativity effect that almost by definition generates surprises in each new crisis. The bottom line is that is real and ultimately cannot be avoided. This raises the question: Does improved regulation of banks add up to a paradox of risk that parallels the famous paradox of thrift? (a) individual risk-taking by financial institutions and markets = stronger growth and more stable clients = lower collective risk; (b) individual aversion by financial institutions and markets = slower growth less stable clients = greater collective risk.