Attention biases the process of risky decision-making: Evidence from eye-tracking

Attention determines what kind of option information is processed during risky choices owing to the limitation of visual attention. This paper reviews research on the relationship between higher-complexity risky decision-making and attention as illustrated by eye-tracking to explain the process of risky decision-making by the effect of attention. We demonstrate this process from three stages: the pre-phase guidance of options on attention, the process of attention being biased, and the impact of attention on final risk preference. We conclude that exogenous information can capture attention directly to salient options, thereby altering evidence accumulation. In particular, for multi-attribute risky decision-making, attentional advantages increase the weight of specific attributes, thus biasing risk preference in different directions. We highlight the significance of understanding how people use available information to weigh risks from an information-processing perspective via process data.

Who is chronically obese in Indonesia? The role of individual preferences

Numerous studies have confirmed the relationship between individual risk and time preference and obesity. Nevertheless, none has studied the effect of these attitudes on chronic (long-term) obesity. This study used Indonesia Family Life Survey (IFLS) data from 16,366 individuals. It tracked their obesity status in 2007 and 2014 by calculating body mass index, the ratio between body weight and square of height. Besides the conventional risk-averse and risk-tolerant behaviour, the IFLS sample includes people who fear uncertainty related to the status quo bias. The ordered logit regression results show that past impatience, risk tolerance, and status quo bias behaviour (in 2007) are associated with transient or chronic obesity, while only current behaviour of status quo bias (in 2014) is associated with obesity. Furthermore, our study confirms that chronic obesity in Indonesia is prevalent among highly educated, high-income, and urban-centric individuals, exacerbated by impatience, risk tolerance, and uncertainty aversion. Thus, providing information on the risk of obesity and food calories, giving the incentive to avoid obesity, and improving the quality of built environments such as public parks, public transportation, and footpath could help prevent the rising obesity prevalence.

Research on the decision-making of work safety investment in industrial park enterprises: evidence from behavioral experiments

Due to the clustering of risk factors, industrial park safety accidents can easily trigger a domino effect. Work safety investment is the foundation of enterprise work safety in industrial parks. Therefore, increasing the work safety investment of enterprises in industrial parks is the key condition to prevent accidents. However, due to the typical negative externalities of industrial park work safety accidents, the decision-making process of work safety in park enterprises is influenced by other enterprises within the park, including imitation behaviors. This makes the decision-making of work safety in park enterprises very specific. In order to clarify the influencing factors and effects of work safety investment in industrial park enterprises, this study uses a behavioral experiment method and conducts decision-making experiments using the experimental platform O-Tree. The study recruits 76 participants who play the role of decision-makers in park enterprises. This study uses a lottery price experiment and a dictator experiment to measure the risk preference and altruism preference of the participants, respectively. The study introduces the real background of work safety investment in industrial park enterprises and collects data on work safety investment by the participants in different experimental scenarios. The research results show that the safety attitudes of decision-makers, altruism preference, accident experience, government work safety supervision, park management measures, and safety benefits positively influence work safety investment in park enterprises. The risk preference of decision-makers and the resource capability of work safety negatively influence work safety investment in park enterprises. Work safety investment in park enterprises is influenced by the work safety investment of other enterprises within the park.

Sirens of stress: Financial risk, time preferences, and post-traumatic stress disorder: Evidence from the Israel-Hamas Conflict

This research explores the relationship between post-traumatic stress disorder (PTSD), resulting from intense violence during the "Guardian of the Walls" operation in 2021, and economic decision-making. We surveyed civilians in Israel who experienced Gaza rocket attacks to understand the influence of PTSD on their financial decisions. The results revealed an interesting trend: PTSD sufferers showed a preference for immediate consumption over future savings and demonstrated a decrease in their willingness to take economic risks. These findings are significant because they offer insight into how trauma affects financial decisions, and crucial information for those helping PTSD sufferers-their relatives and therapists. It is essential for them to be aware of these tendencies to provide appropriate advice and assistance, helping the victims cope with their PTSD and make effective financial decisions in their daily lives.

The role of procedural justice and risk preference-based mechanisms in acceptance of public policy

The current study examines the relationship between procedural justice and acceptance of public policy, the mediating effect of uncertainty as well as the moderating effect of risk preference in this relationship. Study 1 conducted a questionnaire survey on 154 residents from Beijing. The results showed that risk preference moderated the effect of procedural justice on acceptance of public policy. Accordingly, Study 2 conducted a scenario experiment on 136 college students from Beijing to examine the mediating role of uncertainty, while retesting the moderating mechanism of risk preference in more detail. Results showed that risk preference significantly moderated the effect of procedural justice on acceptance of public policy. Specifically, uncertainty was more negatively associated with acceptance of public policy among the risk-averse individuals than risk-seeking individuals. Risk preference indirectly moderated the relationship between procedural justice and acceptance of public policy by moderating the relationship between uncertainty and acceptance of public policy.

Medical occupation preference under the influence of the COVID-19 pandemic: The role of risk and altruistic preferences

We examine the influence of the COVID-19 pandemic on medical occupation preference, focusing on Wuhan, China. We conducted a survey of 5686 respondents in China regarding the influence of the COVID-19 pandemic on medical occupation preference. We also conducted a complimentary survey in the UK with 1198 respondents, as well as a field experiment in Wuhan with 428 first and second-year medical students. We find a significant negative impact of the pandemic on the willingness to let a loved one choose a medical occupation. Individuals who were heavily influenced by the pandemic, that is, Wuhan residents, especially medical workers, express significantly lower medical occupation preference. Further analysis from Sobel-Goodman mediation tests reveals that around half of the total negative effect can be mediated by enhanced risk aversion and reduced altruism. The UK survey and the field experiment with medical students in Wuhan reinforce these findings. Our results suggest a shift in medical workers' risk- and altruistic-preferences has led to a reduced medical occupation preference. Non-medical workers and students who are more altruistic and risk-seeking are more likely to choose a medical occupation.

Hedonic Risk Preference Associated with High-Risk Behaviors under COVID-19 Pandemic among Medical Students in Japan

BACKGROUND

Public health measures to mitigate the spread of COVID-19 have focused on raising awareness and disseminating knowledge. Few considered people's risk preferences and no measurement was adapted to the context of COVID-19. This study aims (1) to investigate the association between risk preference and risk behaviors and (2) to compare a novel hedonic preference question with traditional risk preference assessment tools in the context of the COVID-19 pandemic among medical students in Japan.

METHODS

An online survey of fourth-year medical students was conducted. Logistic regression analysis adjusted for gender, age, household income, and the overconfidence effect were performed to investigate the association.

RESULTS

We observed significantly higher odds of high-risk behaviors in general risk preference (odds ratio (OR): 4.04; 95% confidence interval (CI): 1.05-15.50) and hedonic preference (OR: 6.58; 95% CI: 1.86-23.28) when adjusted, whereas monetary preference showed no significant association. Concerning specific risky behaviors, hedonic preference were significantly associated with four items after adjusting for covariates ("dine out" (OR: 2.78, 95% CI: 1.13-6.85), "go out" (OR: 4.35, 95% CI: 1.65-11.46), "not practicing safety precautions" (OR: 2.79, 95% CI: 1.11-7.04) and "travel" (OR: 4.36, 95% CI: 1.42-13.44)), and general preference in two ("dine out" (OR: 4.82, 95% CI: 1.66-14.00) and "go out" (OR: 6.48, 95% CI: 2.07-20.24)).

CONCLUSION

Hedonic and general risk preferences were significantly associated with high-risk behaviors during the COVID-19 pandemic. Future application of the novel risk-for-pleasure-seeking preference question is warranted.

Understanding the Relationship between Financial Literacy and Chinese Rural Households' Entrepreneurship from the Perspective of Credit Constraints and Risk Preference

Farmers' entrepreneurship is an important factor in promoting rural economic growth, yet few studies have systematically discussed the impact of financial literacy. Using the 2021 China Land Economic Survey data, this study analyzes the relationship between financial literacy and Chinese rural households' entrepreneurship from the perspective of credit constraints and risk preferences by the IV-probit, stepwise regression, and moderating effects methods. This study finds that: (1) the financial literacy of Chinese farmers is low, with only 11.2% of the sample households starting businesses; and (2) Financial literacy can promote rural households' entrepreneurship. After introducing an instrument variable to control endogenous problems, the positive correlation is still significant; (3) financial literacy effectively alleviates the traditional credit constraints of farmers, thereby promoting entrepreneurship; (4) risk preference weakens the positive impact of financial literacy on rural households' entrepreneurship. This study provides a reference for optimizing entrepreneurship policies.

Chimpanzee and Human Risk Preferences Show Key Similarities

Risk preference impacts how people make key life decisions related to health, wealth, and well-being. Systematic variations in risk-taking behavior can be the result of differences in fitness expectations, as predicted by life-history theory. Yet the evolutionary roots of human risk-taking behavior remain poorly understood. Here, we studied risk preferences of chimpanzees (86 Pan troglodytes; 47 females; age = 2-40 years) using a multimethod approach that combined observer ratings with behavioral choice experiments. We found that chimpanzees' willingness to take risks shared structural similarities with that of humans. First, chimpanzees' risk preference manifested as a traitlike preference that was consistent across domains and measurements. Second, chimpanzees were ambiguity averse. Third, males were more risk prone than females. Fourth, the appetite for risk showed an inverted-U-shaped relation to age and peaked in young adulthood. Our findings suggest that key dimensions of risk preference appear to emerge independently of the influence of human cultural evolution.

Time Pressure Affects the Risk Preference and Outcome Evaluation

It is ubiquitous that food delivery riders do not have unlimited periods of time for deliberation to make decisions. Time pressure plays a significant role in decision-making processes. This study investigated how time pressure affected risk preference and outcome evaluation through behavioral and electrophysiological responses during decision-making. Participants finished a simple gambling task under three different time constraint conditions (high/medium/low). Behavioral and event-related potentials (ERPs) data were recorded during the experiment. The results showed that the decision time of people was shorter under high time pressure than under medium and low time pressures. People tend to make more risky choices when under high time pressure. The feedback-related negativity (FRN) amplitude was smaller in the high time pressure than in medium and low time pressure conditions. These findings provided evidence that time pressure has an impact on the risk decision-making process.

The effect of positive autobiographical memory retrieval on decision-making under risk: A computational model-based analysis

Psychiatric disorders such as depressive and anxiety disorders are associated with altered decision-making under risk. Recent advances in neuroeconomics and computational psychiatry have further discomposed risk-based decision-making into distinct cognitive computational constructs and showed that there may be disorder-specific alterations in these constructs. As a result, it has been suggested these cognitive computational constructs may serve as useful behavioral biomarkers for these disorders. However, to date, little is known about what psychological or behavioral interventions can help to reverse and manage the altered cognitive computational constructs underlying risk-based decision-making. In the present study, we set out to investigate whether recalling positive autobiographical memories may affect risk-based decision-making in healthy volunteers using a description-based task. Specifically, based on theories of behavioral economics, we dissected risk preference into two cognitive computational constructs, utility sensitivity and probability weighting. We found that compared to recalling neutral memories, retrieving positive autobiographical memories increased utility sensitivity (Cohen's d = 0.447), indicating reduced risk aversion. Meanwhile, we also tested the influence of memory retrieval on probability weighting, the effect, however, was unreliable and requires further in-depth investigation. Of clinical relevance, the change in risk aversion after recalling positive memories was in the opposite direction compared to those reported in psychiatric disorders. These results argue for the potential therapeutic effect of positive autobiographical memory retrieval for the amendment of altered risk-based decision-making in psychiatric disorders.

Eliciting risk preferences that predict risky health behavior: A comparison of two approaches

Information on attitudes to risk could increase understanding of and explain risky health behaviors. We investigate two approaches to eliciting risk preferences in the health domain, a novel "indirect" lottery elicitation approach with health states as outcomes and a "direct" approach where respondents are asked directly about their willingness to take risks. We compare the ability of the two approaches to predict health-related risky behaviors in a general adult population. We also investigate a potential framing effect in the indirect lottery elicitation approach. We find that risk preferences elicited using the direct approach can better predict health-related risky behavior than those elicited using the indirect approach. Moreover, a seemingly innocuous change to the framing of the lottery question results in significantly different risk preference estimates, and conflicting conclusions about the ability of the indicators to predict risky health behaviors.

A Comparative Analysis of the Effects of Objective and Self-Assessed Financial Literacy on Stock Investment Return

Till now, comprehensive and quantitatively meaningful analyses of stock market participation outcomes of retail investors have been limited by data sources in developing countries. This article devised a special questionnaire related to stock investment to measure the financial literacy (FL) and stock investment return (SIR) for the subjects with stockownership in China and to theoretically and empirically study the effects of objective FL, self-assessed FL, and their composite FL on SIR. The results of the comparative analysis showed that self-assessed FL has a greater effect on SIR than objective FL, and the effect is mediated by risk preference. In addition, we found that competent and overconfident respondents have higher SIR, while under confident respondents cannot gain from the stock market. We also found that risk preference has a positive mediating effect in the relationship between competence and overconfidence and SIR, and a negative mediating effect in the relationship between under confidence and SIR. We thus concluded that confident investors can gain more stockholding returns via taking more risks regardless of the level of their actual financial knowledge. Our findings would be a meaningful complement to the studies of stock market participation.

Nonlinear Probability Weighting in Depression and Anxiety: Insights From Healthy Young Adults

Both depressive and anxiety disorders have been associated with excessive risk avoidant behaviors, which are considered an important contributor to the maintenance and recurrence of these disorders. However, given the high comorbidity between the two disorders, their independent association with risk preference remains unclear. Furthermore, due to the involvement of multiple cognitive computational factors in the decision-making tasks employed so far, the precise underlying mechanisms of risk preference are unknown. In the present study, we set out to investigate the common versus unique cognitive computational mechanisms of risk preference in depression and anxiety using a reward-based decision-making task and computational modeling based on economic theories. Specifically, in model-based analysis, we decomposed risk preference into utility sensitivity (a power function) and probability weighting (the one-parameter Prelec weighting function). Multiple linear regression incorporating depression (BDI-II) and anxiety (STAI state anxiety) simultaneously indicated that only depression was associated with one such risk preference parameter, probability weighting. As the symptoms of depression increased, subjects' tendency to overweight small probabilities and underweight large probabilities decreased. Neither depression nor anxiety was associated with utility sensitivity. These associations remained even after controlling covariates or excluding anxiety-relevant items from the depression scale. To our knowledge, this is the first study to assess risk preference due to a concave utility function and nonlinear probability weighting separately for depression and anxiety using computational modeling. Our results provide a mechanistic account of risk avoidance and may improve our understanding of decision-making deficits in depression and anxiety.

Social Exclusion and Impulsive Buying among Chinese College Students: The Mediating Role of Self-Esteem and the Moderating Role of Risk Preference

With the development of science and technology, buying has become much easier. At the same time, however, impulsive buying has many negative consequences for college students, such as dissatisfaction and debt; the causes of impulsive buying should, therefore, be explored urgently. There are numerous empirical studies indicating that social exclusion may be a potential factor of impulsive buying, and the underlying mechanisms of this association remain unclear. In this study, we used the Social Exclusion Scale, Self-Esteem Scale, Risk Preference Scale, and Impulsive Buying Scale, as well as a cross-sectional design to investigate the roles of self-esteem and risk preference in the relationship between social exclusion and impulsive buying among 768 college students (387 were female, M_age = 20.25 years). The results were as follows: (1) when controlling for gender, age, family monthly income, and monthly living expenses, social exclusion significantly and positively predicted impulsive buying; (2) self-esteem played a mediating role between social exclusion and impulsive buying; (3) risk preference moderated the relationship between the second half of the mediating path and the direct path. These results reveal the mechanism underlying impulsive buying in college students, that is, social exclusion will predict the decrease in college students’ self-esteem, and low self-esteem will further predict college students’ impulsive buying, which is a way for them to gain a sense of self-worth. Relatively low risk preference can well alleviate the negative impact of social exclusion and low self-esteem on impulsive buying. What is more, these results have implications for impulsive buying interventions and preventions. Schools should aim to create a good peer atmosphere by implementing certain rules that help to reduce social exclusion, and parents and education departments should cultivate students’ risk awareness to avoid risk behaviors in college students, such as impulsive buying behavior. This study fills the research gap regarding college students’ impulsive buying and explores its internal psychological mechanism.

Trends in Food Preferences and Sustainable Behavior during the COVID-19 Lockdown: Evidence from Spanish Consumers

The COVID-19 pandemic poses a threat to global food security, and it changes consumers' food buying and consumption behavior. This research not only investigates trends in Spanish consumers' general food shopping and consumption habits during the lockdown, but also investigates these trends from the perspective of sustainable purchasing. Specifically, total food consumption (C), food expenditure (E), and purchase of food with sustainable attributes (S) were measured. Data were collected from a semi-structured questionnaire which was distributed online among 1203 participants. The logit models showed that gender, age, employment status, and consumers' experiences were associated with total food consumption and expenditure during the lockdown. In addition, consumers' risk perceptions, shopping places, trust level in information sources, and risk preference were highly essential factors influencing consumers' preferences and sustainable behavior. Consumers' objective knowledge regarding COVID-19 was related to expenditure. Furthermore, family structure only affected expenditure, while income and place of residence influenced food consumption. Mood was associated with expenditure and the purchase of sustainable food. Household size affected purchasing behavior towards food with sustainable attributes. This research provides references for stakeholders that help them to adapt to the new COVID-19 situation.

Selective effects of serotonin on choices to gather more information

BACKGROUND

Gathering and evaluating information leads to better decisions, but often at cost. The balance between information seeking and exploitation features in neurodevelopmental, mood, psychotic and substance-related disorders. Serotonin's role has been highlighted by experimental reduction of its precursor, tryptophan.

AIMS

We tested the boundaries and applicability of this role by asking whether changes to information sampling would be observed following acute doses of serotonergic and catecholaminergic clinical treatments. We used a variant of the Information Sampling Task (IST) to measure how much information a person requires before they make a decision. This task allows participants to sample information until satisfied to make a choice.

METHODS

In separate double-blind placebo-controlled experiments, we tested 27 healthy participants on/off 20 mg of the serotonin reuptake inhibitor (SRI) citalopram, and 22 participants on/off 40 mg of the noradrenergic reuptake inhibitor atomoxetine. The IST variant minimised effects of temporal impulsivity and loss aversion. Analyses used a variety of participant prior expectations of sampling spaces in the IST, including a new prior that accounts for learning of likely states across trials. We analysed behaviour by a new method that also accounts for baseline individual differences of risk preference.

RESULTS

Baseline preferences demonstrated risk aversion. Citalopram decreased the expected utility of choices and probability of being correct based on informational content of samples collected, suggesting participants collected less useful information before making a choice. Atomoxetine did not influence information seeking.

CONCLUSION

Acute changes of serotonin activity by way of a single SRI dose alter information-seeking behaviour.

The Influence of Regulation on Trust and Risk Preference in Sharing Communities

Sharing within communities has gained popularity in recent years. However, taking part in a community also comes with a certain amount of risk. This perceived amount of risk can be contained by regulations within a community as well as by potential participants' trust in the community and the other members. We argue for a relation between regulation and the willingness to take the risk of joining a sharing community with trust as a mediator. Thereby, we distinguish between two kinds of regulation (soft and harsh regulation) and two kinds of trust (implicit and reason-based trust) on two different levels (vertical and horizontal trust). In one laboratory and one online experiment with 432 participants overall, we found that the compound of high soft and low harsh regulation increases participants' willingness to take the risk of participation and that the effect of soft regulation is mediated mainly by vertical and horizontal reason-based trust. Based on our results, we encourage sharing communities to count on soft regulation in order to increase potential members' trust in the community and therefore take the risk to participate.

The influence of value reference point and risk preference on adherence in hypertensive patients in a low-income area of China

Aims: Prevention and control of hypertension can be achieved by improving patient adherence to long-term treatment regimens. Non-adherence is an obstacle to chronic disease management. We studied the impact of value reference point and risk preference on patient adherence and influencing factors from the perspective of behavioral economics so as to offer targeted recommendations to improving patient adherence in low-income areas.Methods: A representative impoverished area, Qianjiang District in Chongqing was selected as the sample district. A cross-sectional survey using questionnaire augmented with an interview was conducted to collect information with 321 patients previously diagnosed with hypertension stage 3. Preference experiments conducted through scenario simulation were used to elicit and measure patients' value and risk preferences. We constructed a structural equation model to verify the impact of value reference points and risk preference on adherence behavior decision-making. Logistic regression models were constructed to analyze other factors that may influence adherence.Results: Adherence was determined by patients' value reference points (path coefficient = 0.876, p < 0.01) and risk preference (path coefficient = 0.715, p < 0.01). The factor loadings of all indicators on the latent variables were significant (p < 0.01). Hypertensive patients in our cohort adhered poorly to health management and were heavily influenced by knowledge of hypertension, expectation, health literacy and opportunity costs. Certainty effect, overconfidence and optimism significantly affected patients' risk preference in decision-making progress. In the face of the uncertain benefits of adherence, patients preferred to delay treatment until condition affected their quality of life, resulting in poor adherence. Satisfaction with current services and relationship with physicians, as well as type of drugs also influenced adherence.Conclusions: Adherence may be improved by changing patients' value reference points and perceptions through health education and better health service resources. One of the key to increasing adherence is through identifying and eliminating bias.

Farmers' Risk Cognition, Risk Preferences and Climate Change Adaptive Behavior: A Structural Equation Modeling Approach

Improving local farmers' climate change adaptive capacity is an important policy issue in rural China. This study investigates farmers' risk cognition, risk preferences and climate change adaptive behavior. Based on unique data from a survey and a paired lottery experiment completed by 240 rural farmers in Chongqing City of China, this paper finds that farmers have a pessimistic risk cognition towards climate change and the typical farmers are risk-averse and loss-averse. Risk cognition and adaptation cognition have significantly positive influences on climate change adaptive behavior, and loss aversion has a significantly positive influence on farmers' adaptation decisions. Loss aversion exerts a positive impact on risk cognition and adaptation cognition, and risk aversion has a positive impact on adaptation cognition. This paper contributes to the emerging literature that relates risk preference in experiments and risk cognition to farmers' climate change adaptive behavior.

Riskier for me or for others? The role of domain and probability in self-other differences, in risky decision-making

In social and economic interactions, people often decide differently for others, as against for themselves, under situations involving risks. This sometimes leads to conflicts or contradictions. Although previous studies have explored such contradictions, the findings have been inconsistent. To reconcile these inconsistencies, this paper investigates the role played by the different domains and probabilities in the self-other differences under risk. Two groups of participants completed a gambling task combining different domains (gain vs. loss) and probabilities (small vs. large). One group made decisions for others and the other group made decisions for themselves. The results revealed a four pattern of discrepancy: the ones who made decisions for others were less risk-seeking than those who made decisions for themselves over the small probability gains. This was reversed over the large probability gains. Conversely, the participants who made decisions for others were more risk-seeking than those who made decisions for themselves over the small probability losses. The results were reversed over the large probability losses. These results reconcile the contradictory findings of the previous studies and suggest the significant role played by contextual factors in such discrepancies.

Changes over time in marijuana use, deviant behavior and preference for risky behavior among US adolescents from 2002 to 2014: testing the moderating effect of gender and age

BACKGROUND AND AIMS

Among adolescents, risk preference and deviant behaviors are associated with marijuana use, which exhibit substantial historical trends. We examined (1) trends, (2) effect modification by sex and age, (3) associations of marijuana use with deviant behaviors and risk preferences and (4) differences by sex, age and year.

DESIGN

Adjusted logistic and relative risk regression models, using data from the 2002-14 National Survey on Drug Use and Health, annual cross-sectional surveys of US households.

SETTING

United States.

PARTICIPANTS

A nationally representative sample of adolescents aged 12-17 years (n = 230 452).

MEASUREMENTS

We estimated associations between past-year marijuana use [self-reported using computer-assisted personal interviewing/audio computer-assisted self-interviewing (CAPI/ACASI)], deviant behavior (i.e. selling drugs; stealing; attacking someone) and risk preference (i.e. getting a kick; testing oneself).

FINDINGS

Marijuana use, deviant behaviors and risk preferences declined among adolescents from 2002 to 2014. There were no significant sex or age differences in the decline of marijuana use over time. There were sex [sold drugs: β = 0.90, 95% confidence interval (CI) = 0.75, 1.04] and age (attacked someone: β = 0.32, 95% CI = 0.22, 0.42) differences in the prevalence of deviant behaviors, and trends over time differed by sex and age for attacking someone.

CONCLUSIONS

While marijuana use, deviant behavior and risk preferences among US adolescents declined from 2002 to 2014, associations have remained stable, with marijuana use positively associated with deviant behaviors and risk preferences.

High Self-Control Reduces Risk Preference: The Role of Connectivity Between Right Orbitofrontal Cortex and Right Anterior Cingulate Cortex

Risk preference, the preference for risky choices over safe alternatives, has a great impact on many fields, such as physical health, sexual safety and financial decision making. Ample behavioral research has attested that inadequate self-control can give rise to high risk preference. However, little is known about the neural substrates underlying the effect of self-control on risk preference. To address this issue, we combined voxel-based morphometry (VBM) with resting-state functional connectivity (RSFC) analyses to explore the neural basis underlying the effect of self-control on risk preference across two independent samples. In sample 1 (99 participants; 47 males; 20.37 ± 1.63 years), the behavioral results indicated that the scores of self-control were significantly and negatively correlated with risk preference (indexed by gambling rate). The VBM analyses demonstrated that the higher risk preference was correlated with smaller gray matter volumes in right orbitofrontal cortex (rOFC) and right posterior parietal cortex. In the independent sample 2 (80 participants; 33 males; 20.33 ± 1.83 years), the RSFC analyses ascertained that the functional connectivity of rOFC and right anterior cingulate cortex (rACC) was positively associated with risk preference. Furthermore, the mediation analysis identified that self-control mediated the impact of functional connectivity of rOFC-rACC on risk preference. These findings suggest the functional coupling between the rOFC and rACC might account for the association between self-control and risk preference. The present study extends our understanding on the relationship between self-control and risk preference, and reveals possible neural underpinnings underlying this association.

Three gaps and what they may mean for risk preference

Risk preference is one of the most important building blocks of choice theories in the behavioural sciences. In economics, it is often conceptualized as preferences concerning the variance of monetary payoffs, whereas in psychology, risk preference is often thought to capture the propensity to engage in behaviour with the potential for loss or harm. Both concepts are associated with distinct measurement traditions: economics has traditionally relied on behavioural measures, while psychology has often relied on self-reports. We review three important gaps that have emerged from work stemming from these two measurement traditions: first, a description-experience gap which suggests that behavioural measures do not speak with one voice and can give very different views on an individual's appetite for risk; second, a behaviour-self-report gap which suggests that different self-report measures, but not behavioural measures, show a high degree of convergent validity; and, third, a temporal stability gap which suggests that self-reports, but not behavioural measures, show considerable temporal stability across periods of years. Risk preference, when measured through self-reports-but not behavioural tests-appears as a moderately stable psychological trait with both general and domain-specific components. We argue that future work needs to address the gaps that have emerged from the two measurement traditions and test their differential predictive validity for important economic, health and well-being outcomes. This article is part of the theme issue 'Risk taking and impulsive behaviour: fundamental discoveries, theoretical perspectives and clinical implications'.

A Review of Consequences of Poverty on Economic Decision-Making: A Hypothesized Model of a Cognitive Mechanism

This review focuses on the issue of poverty affecting economic decision-making. By critically evaluating existing studies, the authors propose a structural model detailing the cognitive mechanism involved in how poverty negatively impacts economic decision-making, and explores evidence supporting the basis for the formation of this model. The suggested mechanism consists of a relationship between poverty and four other factors: (1) cognitive load (e.g., experiencing negative affect and stress); (2) executive functions (e.g., attention, working memory, and self-control); (3) intuition/deliberation in decision-making; and (4) economic decision-making (e.g., time-discounting and risk preference), with a final addition of financial literacy as a covariate. This paper focuses on shortfalls in published research, and delves further into the proposed model.

Linguistic Multi-Attribute Group Decision Making with Risk Preferences and Its Use in Low-Carbon Tourism Destination Selection

Low-carbon tourism plays an important role in carbon emission reduction and environmental protection. Low-carbon tourism destination selection often involves multiple conflicting and incommensurate attributes or criteria and can be modelled as a multi-attribute decision-making problem. This paper develops a framework to solve multi-attribute group decision-making problems, where attribute evaluation values are provided as linguistic terms and the attribute weight information is incomplete. In order to obtain a group risk preference captured by a linguistic term set with triangular fuzzy semantic information, a nonlinear programming model is established on the basis of individual risk preferences. We first convert individual linguistic-term-based decision matrices to their respective triangular fuzzy decision matrices, which are then aggregated into a group triangular fuzzy decision matrix. Based on this group decision matrix and the incomplete attribute weight information, a linear program is developed to find an optimal attribute weight vector. A detailed procedure is devised for tackling linguistic multi-attribute group decision making problems. A low-carbon tourism destination selection case study is offered to illustrate how to use the developed group decision-making model in practice.

Decisions for Others Are Less Risk-Averse in the Gain Frame and Less Risk-Seeking in the Loss Frame Than Decisions for the Self

Despite the fact that people make decisions for others as often as they make decisions for themselves, little is known about how decisions for others are different from those made for the self. In two experiments, we investigated the effect of social distance (i.e., making decisions for oneself, a friend, or a stranger) on risk preferences in both gain and loss situations. We found that people were more risk averse in gain situations when they made decisions for themselves than for a stranger (Studies 1 and 2), but were equally risk averse for themselves and their friends (Study 2). However, people were more risk seeking in loss situations when they made decisions for themselves than for their friends as well as for a stranger, and were more risk seeking for their friends than for a stranger (Study 2). Furthermore, the effect of social distance on risk preferences was stronger in loss than in gain situations. Mediation analysis indicated that outcome-induced loss aversion was responsible for effects of social distance on risk preferences. These findings demonstrate that social distance influences risk preferences via perceived loss aversion, which sheds new light on self-other differences in decision making.

Farmers' Risk Preferences in Rural China: Measurements and Determinants

This study measures farmers’ risk attitudes in rural China using a survey instrument and a complementary experiment conducted in the field with the same sample of subjects. Using a question asking people about their willingness to take risks “in general”, we found that the average response of our sample is slightly risk averse. Farmers’ exogenous factors (age, gender, and height) and self-reported happiness have a significant impact on farmers’ willingness to take risks. The experiment results show that approximately 44% of farmers in the study area are risk averse. We compare farmers’ self-reported measures of risk preferences derived from the survey instrument to preferences elicited through the experimental task. Results show that answers to the general risk attitude question in the survey can predict farmers’ behaviors in the experiment to a statistically significant degree. This paper can contribute to the empirical literature on comparing local farmers’ risk attitudes across different risk preference measurement methods in the developing world.

Activation of the DLPFC Reveals an Asymmetric Effect in Risky Decision Making: Evidence from a tDCS Study

The phenomenon of loss aversion (the tendency for losses to have a greater impact than comparable gains) has long been observed in daily life. Neurocognitive studies and brain imaging studies have shed light on the correlation between the phenomenon of loss aversion and the brain region of the prefrontal cortex. Recent brain stimulation studies using bilateral transcranial magnetic stimulation or transcranial direct current stimulation (tDCS) have obtained various results showing the causal relationship between brain regions and decision making. With the goal of studying whether unilateral stimulation can change participants’ risky decision making in the frames of gains and losses, we applied different polarities of tDCS over the regions of the right or left prefrontal cortex. We also designed a risk measurement table (Multiple Price List) to reflect the participants’ attitudes toward risky decision making via the crossover point including the frames of gains and losses. The results of our experiment indicated that the participants tended to be more risk averse in the gain frame after receiving left anodal tDCS and more risk seeking in the loss frame after receiving right cathodal tDCS, which was consistent with the hypothesis that the process of risky decision making was correlated with the interaction of multiple systems in the brain. Our conclusion revealed an asymmetric effect of right/left DLPFC when the participants faced gains and losses, which partially provided the neural evidence and a feasible paradigm to help better understand risky decision making and loss aversion. The current study can not only expand the traditional understanding of the behavioral preferences of humans in economics but also accommodate empirical observations of behavioral economists on the preferences of humans.

From risk-seeking to risk-averse: the development of economic risk preference from childhood to adulthood

Adolescence is often described as a period of heightened risk-taking. Adolescents are notorious for impulsivity, emotional volatility, and risky behaviors such as drinking and driving under the influence of alcohol. By contrast, we found that risk-taking declines linearly from childhood to adulthood when individuals make choices over monetary gambles. Further, with age we found increases in the sensitivity to economic risk, defined as the degree to which a preference for assured monetary gains over a risky payoff depends upon the variability in the risky payoff. These findings indicate that decisions about economic risk may follow a different developmental trajectory than other kinds of risk-taking, and that changes in sensitivity to risk may be a major factor in the development of mature risk aversion.

Alcohol demand and risk preference

Both economists and psychologists have studied the concept of risk preference. Economists categorize individuals as more or less risk-tolerant based on the marginal utility of income. Psychologists categorize individuals' propensity towards risk based on harm avoidance, novelty seeking and reward dependence traits. The two concepts of risk are related, although the instruments used for empirical measurement are quite different. Psychologists have found risk preference to be an important determinant of alcohol consumption; however economists have not included risk preference in studies of alcohol demand. This is the first study to examine the effect of risk preference on alcohol consumption in the context of a demand function. The specifications employ multiple waves from the Panel Study of Income Dynamics (PSID) and the Health and Retirement Study (HRS), which permit the estimation of age-specific models based on nationally representative samples. Both of these data sets include a unique and consistent survey instrument designed to directly measure risk preference in accordance with the economist's definition. This study estimates the direct impact of risk preference on alcohol demand and also explores how risk preference affects the price elasticity of demand. The empirical results indicate that risk preference has a significant negative effect on alcohol consumption, with the prevalence and consumption among risk-tolerant individuals being 6-8% higher. Furthermore, the tax elasticity is similar across both risk-averse and risk-tolerant individuals. This suggests that tax policies are as equally effective in deterring alcohol consumption among those who have a higher versus a lower propensity for alcohol use.