Risk Attitude,Ambiguity Intolerance and Decision Making: An Exploratory Investigation*

Although recent research has identified attitudes towards ambiguity and risk to be important determinants of choice behavior [8] [18], no prior work jointly assessed the roles of both attitudes. We conducted a laboratory experiment using a real decision scenario and conducted exploratory analyses of the relationship between attitudes towards risk and ambiguity and the decision taken by the subjects. The results support the prediction that attitudes towards both risk and ambiguity affect choice behavior. Our exploratory analyses indicate interesting avenues for future research, including an examination of the decision process itself.     

Temporal Resolution of Uncertainty and Recursive Models of Ambiguity Aversion

Dynamic models of ambiguity aversion are increasingly popular in applied work. This paper shows that there is a strong interdependence in such models between the ambiguity attitude and the preference for the timing of the resolution of uncertainty, as defined by the classic work of Kreps and Porteus (1978). The modeling choices made in the domain of ambiguity aversion influence the set of modeling choices available in the domain of timing attitudes. The main result is that the only model of ambiguity aversion that exhibits indifference to timing is the maxmin expected utility of Gilboa and Schmeidler (1989). This paper examines the structure of the timing nonindifference implied by the other commonly used models of ambiguity aversion. This paper also characterizes the indifference to long‐run risk, a notion introduced by Duffie and Epstein (1992). The interdependence of ambiguity and timing that this paper identifies is of interest both conceptually and practically—especially for economists using these models in applications.     

Relationships between leadership and professionals' job attitudes and perceptions: Comparison of two leadership models

The aim of this study was to investigate the power of the Average Leadership Style (ALS) and Vertical Dyad Linkage (VDL) models of leadership in explaining relationships between leader's initiating structure behaviour and consideration behaviour, and subordinates' attitudes and perceptions. The considered dependent variables were five facets of job satisfaction, two role stress variables (role conflict and ambiguity), one role strain indicator (job tension), and four dimensions of workteam climate. The relationships were investigated in two occupational samples comprising 127 family physicians and 155 nurses working in 28 Primary Health Care Teams. Within and between analysis (WABA) and contextual analysis were applied in order to determine the appropriate level of analysis (group as expected from ALS or individual as expected from VDL) for studying the relationships between leader consideration and initiating structure behaviours and the dependent variables. The results obtained showed the prevalence of the VDL model in most of the cases, although two of the relationships studied fitted the ALS model.     

Effects of Knowledge on Attitude Formation and Change Toward Genetically Modified Foods

In three waves, this study investigates the impact of risk and benefit knowledge on attitude formation toward genetically modified (GM) foods as well as the moderating effect of knowledge level on attitude change caused by receiving information. The data in Wave 1 (N = 561) demonstrate that both benefit and risk knowledge either directly contribute to attitude formation or indirectly affect attitudes through the mediating roles of benefit and risk perceptions. Overall, benefit and risk knowledge affect consumer attitudes positively and negatively, respectively. In Wave 2, 486 participants from Wave 1 were provided with information about GM foods, and their attitudes were assessed. Three weeks later, 433 of these participants again reported their attitudes. The results indicate that compared with the benefit and mixed information, risk information has a greater and longer lasting impact on attitude change, which results in lower acceptance of GM foods. Furthermore, risk information more strongly influences participants with a higher knowledge level. The moderating effect of knowledge on attitude change may result from these participants’ better understanding of and greater trust in the information. These findings highlight the important role of knowledge in attitude formation and attitude change toward GM foods as well as the necessity of considering the determinants of attitude formation in attitude change studies.     

A Smooth Model of Decision Making under Ambiguity

We propose and characterize a model of preferences over acts such that the decision maker prefers act f to act g if and only if 𝔼_μφ(𝔼_πu○f) 𝔼_μφ(𝔼_πu○g), where 𝔼 is the expectation operator, u is a von Neumann–Morgenstern utility function, φis an increasing transformation, and μis a subjective probability over the set Πof probability measures πthat the decision maker thinks are relevant given his subjective information. A key feature of our model is that it achieves a separation between ambiguity, identified as a characteristic of the decision maker's subjective beliefs, and ambiguity attitude, a characteristic of the decision maker's tastes. We show that attitudes toward pure risk are characterized by the shape of u, as usual, while attitudes toward ambiguity are characterized by the shape of φ. Ambiguity itself is defined behaviorally and is shown to be characterized by properties of the subjective set of measures Π. One advantage of this model is that the well‐developed machinery for dealing with risk attitudes can be applied as well to ambiguity attitudes. The model is also distinct from many in the literature on ambiguity in that it allows smooth, rather than kinked, indifference curves. This leads to different behavior and improved tractability, while still sharing the main features (e.g., Ellsberg's paradox). The maxmin expected utility model (e.g., Gilboa and Schmeidler (1989)) with a given set of measures may be seen as a limiting case of our model with infinite ambiguity aversion. Two illustrative portfolio choice examples are offered.     

Leadership,information, and risk attitude: A game theoretic approach

This paper experimentally investigates how risk attitudes mitigate leadership effectiveness in a collective setting with projects that exhibit both free riding and coordination problems. We take two novel approaches: 1) the introduction of economic game theory to psychological studies of leadership, and 2) the application of the leadership ontology of Drath et al. (2008) as a cross-disciplinary integrative framework. Leadership here is focused on the presence or absence of direction, alignment, and commitment as well as antecedent beliefs and practices that are held within a collective (for us, our experimental participants). Our leadership context is stripped down to very minimal conditions: three group members, an investment decision, and the introduction of information regarding group members' attitudes toward risk. We find that the mere mention of risk attitude (whether risky or risk averse) undermines leadership effectiveness in mitigating free riding for our 420 experimental participants. Our study's primary implications lie in the application of game theory methodology to the psychological study of leadership, the introduction of relevant individual difference constructs to economic studies of leadership, and the advocation of the Drath et al. (2008) framework as a helpful integrative mechanism for interdisciplinary leadership research.     

Vector Expected Utility and Attitudes Toward Variation

This paper proposes a model of decision under ambiguity deemed vector expected utility, or VEU. In this model, an uncertain prospect, or Savage act, is assessed according to (a) a baseline expected‐utility evaluation, and (b) an adjustment that reflects the individual's perception of ambiguity and her attitudes toward it. The adjustment is itself a function of the act's exposure to distinct sources of ambiguity, as well as its variability. The key elements of the VEU model are a baseline probability and a collection of random variables, or adjustment factors, which represent acts exposed to distinct ambiguity sources and also reflect complementarities among ambiguous events. The adjustment to the baseline expected‐utility evaluation of an act is a function of the covariance of its utility profile with each adjustment factor, which reflects exposure to the corresponding ambiguity source. A behavioral characterization of the VEU model is provided. Furthermore, an updating rule for VEU preferences is proposed and characterized. The suggested updating rule facilitates the analysis of sophisticated dynamic choice with VEU preferences.     

职场Tweens的消费态度及相关因素差异性分析

对职场Tweens的消费态度进行了研究,发现可将职场Tweens的消费态度分为炫耀型、变动型和理智型3种类型.分析了性别、文化程度等人口统计学变量对某一特定消费类型影响的差异程度,结果显示:不同性别的职场Tweens在炫耀型消费方面无显著差异,而在变动型消费和理智型消费方面有显著差异;不同文化程度的职场Tweens仅在炫耀型消费方面有显著差异;处于不同城市的职场Tweens也仅在炫耀型消费方面有显著差异.     

Domain Effects and Financial Risk Attitudes

We investigated whether financial risk preferences are dependent on the financial domain (i.e., the context) in which the risky choice options are presented. Previous studies have demonstrated that risk attitudes change when gambles are framed as gains, losses, or as insurance. Our study explores this directly by offering choices between identical gambles, framed in terms of seven financial domains. Three factors were extracted, explaining 68.6% of the variance: Factor 1 (Positive)—opportunity to win, pension provision, and job salary change; Factor 2 (Positive‐Complex)—investments and mortgage buying; Factor 3 (Negative)—possibility of loss and insurance. Inspection of the solution revealed context effects on risk perceptions across the seven scenarios. We also found that the commonly accepted assumption that women are more risk averse cannot be confirmed with the context structure suggested in this research; however, it is acknowledged that in the students’ population the variance across genders might be considerably less. These results suggest that our financial risk attitude measures may be tapping into a stable aspect of “context dependence” of relevance to real‐world decision making.     

The Role of Affect in Attitude Formation toward New Technologies: The Case of Stratospheric Aerosol Injection

This article analyzes determinants of technology acceptance and their interdependence. It highlights the role of affect in attitude formation toward new technologies and examines how it mediates the influence of stable psychological variables on the technology's acceptability. Based on theory and previous empirical evidence, we develop an analytical framework of attitude formation. We test this framework using survey data on attitudes toward stratospheric aerosol injection (SAI), a technology that could be used to counteract global warming. We show that affect is more important than risk and benefit perception in forming judgment about SAI. Negative and positive affect directly alter the perception of risks and benefits of SAI and its acceptability. Furthermore, affect is an important mediator between stable psychological variables—such as trust in governmental institutions, values, and attitudes—and acceptability. A person's affective response is thus guided by her general attitudes and values.     

The Influence of Uncertain Map Features on Risk Beliefs and Perceived Ambiguity for Maps of Modeled Cancer Risk from Air Pollution

Maps are often used to convey information generated by models, for example, modeled cancer risk from air pollution. The concrete nature of images, such as maps, may convey more certainty than warranted for modeled information. Three map features were selected to communicate the uncertainty of modeled cancer risk: (i) map contours appeared in or out of focus, (ii) one or three colors were used, and (iii) a verbal‐relative or numeric risk expression was used in the legend. Study aims were to assess how these features influenced risk beliefs and the ambiguity of risk beliefs at four assigned map locations that varied by risk level. We applied an integrated conceptual framework to conduct this full factorial experiment with 32 maps that varied by the three dichotomous features and four risk levels; 826 university students participated. Data was analyzed using structural equation modeling. Unfocused contours and the verbal‐relative risk expression generated more ambiguity than their counterparts. Focused contours generated stronger risk beliefs for higher risk levels and weaker beliefs for lower risk levels. Number of colors had minimal influence. The magnitude of risk level, conveyed using incrementally darker shading, had a substantial dose‐response influence on the strength of risk beliefs. Personal characteristics of prior beliefs and numeracy also had substantial influences. Bottom‐up and top‐down information processing suggest why iconic visual features of incremental shading and contour focus had the strongest visual influences on risk beliefs and ambiguity. Variations in contour focus and risk expression show promise for fostering appropriate levels of ambiguity.     

Local Acceptance of a High-Level Nuclear Waste Repository

The siting of nuclear waste facilities has been very difficult in all countries. Recent experience in Sweden indicates, however, that it may be possible, under certain circumstances, to gain local support for the siting of a high-level nuclear waste (HLNW) repository. The article reports on a study of attitudes and risk perceptions of people living in four municipalities in Sweden where HLNW siting was being intensely discussed at the political level, in media, and among the public. Data showed a relatively high level of consensus on acceptability of at least further investigation of the issue; in two cases local councils have since voted in favor of a go-ahead, and in one case only a very small majority defeated the issue. Models of policy attitudes showed that these were related to attitude to nuclear power, attributes of the perceived HLNW risk, and trust. Factors responsible for acceptance are discussed at several levels. One is the attitude to nuclear power, which is becoming more positive, probably because no viable alternatives are in sight. Other factors have to do with the extensive information programs conducted in these municipalities, and with the logical nature of the conclusion that they would be good candidates for hosting the national HLNW repository.     

How Reassuring are Risk Comparisons to Pollution Standards and Emission Limits?

Pollutant emissions or ambient levels are often justified by reference to a higher benchmark, such as a public health standard or permit limit. However, does this risk comparison persuade the public audiences to whom it is frequently directed that such pollution levels are “acceptable”? A substantial proportion of people living within one mile of New Jersey's industrial facilities, perhaps as much as half, is indeed reassured by a comparison to such benchmarks. Positive attitudes toward discharge limits were linked to speaking English at home; positive attitudes toward drinking water standards were associated with seeing local benefits of industry as outweighing its risks, not speaking English, and relative youth (49 years old or less). Three scenarios involving drinking water contamination varied pre‐ and post‐treatment levels of the pollutant, though all post‐treatment levels were below the standard. In all cases great concern was expressed, with no significant differences across scenarios; net benefits, being white, and non‐English speaking were linked to lower concern. Relative trust seems a better explanation of different attitudes toward benchmark comparisons than varying levels of knowledge, but both hypotheses have drawbacks that merit further testing. These results imply that people with negative views of industry or government, the ones officials might most wish to reassure, will tend to doubt that regulatory benchmarks offer a valid risk comparison.     

Communicating Earthquake Preparedness: The Influence of Induced Mood,Perceived Risk,and Gain or Loss Frames on Homeowners’ Attitudes Toward General Precautionary Measures for Earthquakes

Despite global efforts to reduce seismic risk, actual preparedness levels remain universally low. Although earthquake‐resistant building design is the most efficient way to decrease potential losses, its application is not a legal requirement across all earthquake‐prone countries and even if, often not strictly enforced. Risk communication encouraging homeowners to take precautionary measures is therefore an important means to enhance a country's earthquake resilience. Our study illustrates that specific interactions of mood, perceived risk, and frame type significantly affect homeowners’ attitudes toward general precautionary measures for earthquakes. The interdependencies of the variables mood, risk information, and frame type were tested in an experimental 2 × 2 × 2 design (N = 156). Only in combination and not on their own, these variables effectively influence attitudes toward general precautionary measures for earthquakes. The control variables gender, “trait anxiety” index, and alteration of perceived risk adjust the effect. Overall, the group with the strongest attitudes toward general precautionary actions for earthquakes are homeowners with induced negative mood who process high‐risk information and gain‐framed messages. However, the conditions comprising induced negative mood, low‐risk information and loss‐frame and induced positive mood, low‐risk information and gain‐framed messages both also significantly influence homeowners’ attitudes toward general precautionary measures for earthquakes. These results mostly confirm previous findings in the field of health communication. For practitioners, our study emphasizes that carefully compiled communication measures are a powerful means to encourage precautionary attitudes among homeowners, especially for those with an elevated perceived risk.     

INDIVIDUAL RISK ATTITUDES: MEASUREMENT,DETERMINANTS, AND BEHAVIORAL CONSEQUENCES

This paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects' homes. Using a question asking people about their willingness to take risks “in general”, we find that gender, age, height, and parental background have an economically significant impact on willingness to take risks. The experiment confirms the behavioral validity of this measure, using paid lottery choices. Turning to other questions about risk attitudes in specific contexts, we find similar results on the determinants of risk attitudes, and also shed light on the deeper question of stability of risk attitudes across contexts. We conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks, occupational choice, and smoking. The question about risk taking in general generates the best all‐round predictor of risky behavior.     

Peer Effects in Risk Aversion

We estimate peer effects in risk attitudes in a sample of high school students. Relative risk aversion is elicited from surveys administered at school. Identification of peer effects is based on parents not being able to choose the class within the school of their choice, and on the use of instrumental variables conditional on school‐grade fixed effects. We find a significant and quantitatively large impact of peers’ risk attitudes on a male individual's coefficient of risk aversion. Specifically, a one standard deviation increase in the group's coefficient of risk aversion increases an individual's risk aversion by 43%. Our findings shed light on the origin and stability of risk attitudes and, more generally, on the determinants of economic preferences.     

Laypeople''s and Experts'' Perception of Nanotechnology Hazards

Public perception of nanotechnology may influence the realization of technological advances. Laypeople's (N=375) and experts' (N=46) perception of 20 different nanotechnology applications and three nonnanotechnology applications were examined. The psychometric paradigm was utilized and applications were described in short scenarios. Results showed that laypeople and experts assessed asbestos as much more risky than nanotechnology applications. Analyses of aggregated data suggested that perceived dreadfulness of applications and trust in governmental agencies are important factors in determining perceived risks. Similar results were observed for experts and laypeople, but the latter perceived greater risks than the former. Analyses of individual data showed that trust, perceived benefits, and general attitudes toward technology influenced the perceived risk of laypeople. In the expert sample, confidence in governmental agencies was an important predictor of risks associated with nanotechnology applications. Results suggest that public concerns about nanotechnology would diminish if measures were taken to enhance laypeople's trust in governmental agencies.     

Partial Ambiguity

We extend Ellsberg's two‐urn paradox and propose three symmetric forms of partial ambiguity by limiting the possible compositions in a deck of 100 red and black cards in three ways. Interval ambiguity involves a symmetric range of 50 − n to 50 + n red cards. Complementarily, disjoint ambiguity arises from two nonintersecting intervals of 0 to n and 100 − n to 100 red cards. Two‐point ambiguity involves n or 100 − n red cards. We investigate experimentally attitudes towards partial ambiguity and the corresponding compound lotteries in which the possible compositions are drawn with equal objective probabilities. This yields three key findings: distinct attitudes towards the three forms of partial ambiguity, significant association across attitudes towards partial ambiguity and compound risk, and source preference between two‐point ambiguity and two‐point compound risk. Our findings help discriminate among models of ambiguity in the literature.     

Under pressure! Team innovative climate and individual attitudes in shaping individual improvisation

By embracing a perspective grounded in the Theory of Reasoned Action, this paper investigates the mechanisms through which team climate affects individual improvisation. By relying on data from 134 individuals belonging to 25 artistic collectives, our paper shows that team innovative climate impacts individual improvisation by triggering individual proactive attitude and risk aversion attitude. Because our research spans across different levels of analysis, we developed a multilevel model for analyzing our hypotheses. Our study complements the results of previous research by asserting that improvisation is not an inherently individual phenomenon; rather, improvisation is also affected by the characteristics of the team in which individuals are embedded.