In the wake of the current financial crises triggered by risky mortgage-backed securities, the question of ethics and risk-taking is once again at the front and center for both practitioners and academics. Although risk-taking is considered an integral part of strategic decision-making, sometimes firms could be propelled to take risks driven by reasons other than calculated strategic choices. The authors argue that a firm's risk-taking propensity is impacted by its ethical climate (egoistic or benevolent) (...) and its emphasis on output control to manage its marketing function. The firm's long-term orientation is argued to moderate the control–risk propensity relationship. The authors also extend research on risk and performance and argue that the association of risk-taking propensity and firm performance is contingent on the ownership (publicly traded versus privately held) structure of the firm. Based on survey data from a sample of manufacturing industries in the United States, the results show significant impact of ethical climate and marketing output control on a firm's risk-taking propensity; also risk-taking propensity shows a stronger association with firm performance in privately held firms than in publicly traded firms. (shrink)

Risk Taking in Higher Education includes authors from numerous academic disciplines to emphasize both the importance of risk-taking across higher education and to highlight the varied approaches to incorporate risk-taking into classroom practices.

We examine the implications of the US government’s too-big-to-fail policy as it has been applied to banks. Using alternative measures of risk, we compare the risk-taking behavior of 11 TBTF banks, identified by the Comptroller of the Currency in 1984, to a number of non-TBTF banks. We provide both theory and new empirical evidence to support our argument that the TBTF policy leads management to significantly increase risk-taking, with no corresponding increase in performance. While prior (...) studies have considered the effects of the TBTF policy on limited, but risk-related aspects of bank behavior, such as the cost of funds, our study provides direct evidence about the risk-taking behavior associated with the TBTF policy. Our study has important implications for the current political debate regarding the too-big-to-fail policy. (shrink)

Much research has explored the physiological, energetic, environmental, and psychological factors that influence pacing in endurance events. Although this research has generally neglected the role of psychological variation across individuals, recent studies have hinted at its importance. Here we conducted an online survey of over 1,300 marathon runners, testing whether any of five psychological constructs—competitiveness, goal achievement, risk taking in pace (RTP), domain-specific risk taking, and willingness to suffer in the marathon—predicted slowing in runners’ most recent (...) marathons. Analyses revealed that RTP—the extent to which runners agreed that they began the marathon at a pace that was so fast that it would jeopardize their capacity to maintain this pace throughout the event—was a robust predictor of marathon slowing. RTP proved a substantial predictor even in regression models controlling for the other psychological constructs, training, experience, and other known pacing correlates. This result suggests that marathoners consider trade-offs when making pacing decisions, and that individuals vary in their pacing decision making. (shrink)

Are risk-takers more likely to engage in unethical behaviors? We examined the relationship between risk-taking propensity and cheating in two experimental studies. In Study 1, we examined the relationship between subjects’ risk-taking propensity and their actual self-serving dishonesty using a gambling-like task. The results suggested that risk-taking propensity, measured using a behavioral approach, was positively correlated with actual self-serving dishonest behavior. In Study 2, we measured participants’ performances using a matrices test and found (...) that the positive correlation still held. We found that participants with high risk-taking propensity reported a lower perceived probability of being detected, which might drive their dishonest behavior. (shrink)

Figner, Mackinlay, Wilkening, and Weber (2009) developed the Columbia Card Task (CCT) to measure risk-taking attitudes. This tool consists of two versions: in the COLD version the decision maker needs to state in advance how many cards (out of 32) they want to turn over (so called static risk taking), in the HOT version they have the possibility of turning over all 32 cards one-by-one until they decide to finish (dynamic risk taking). We argue (...) that the HOT version confounds an individual’s willingness to accept risk with their beliefs in trend continuation vs. trend reversal in a prognostic task. In two experimental studies we show that people believing in trend continuation (momentum subjects) turn over more cards than those believing in trend reversal (contrarians) in the HOT version of the task. However, this is not the case in the COLD version. Thus, we provide evidence that, when considered as a dynamic risk propensity measure, the number of turned over cards in the HOT version of the CCT is a contaminated measure and reflects two phenomena: (1) risk preference and (2) the decision-maker’s belief in trend continuation. We speculate that other dynamic risk taking measures can also be biased by a momentum strategy. (shrink)

In two pre-registered online studies during the COVID-19 pandemic and the early 2020 lockdown (one of which with a UK representative sample) we elicit risk-tolerance for 1,254 UK residents using four of the most widely applied risk-taking tasks in behavioral economics and psychology. Specifically, participants completed the incentive-compatible Balloon Analog Risk Task (BART) and the Binswanger-Eckel-Grossman (BEG) multiple lotteries task, as well as the Domain-Specific Risk-Taking Task (DOSPERT) and the self-reported questions for risk- (...) class='Hi'>taking used in the German Socio-economic Panel (SOEP) study. In addition, participants in the UK representative sample answered a range of questions about COVID-19-related risky behaviors selected from the UCL COVID-19 Social Survey and the ICL-YouGov survey on COVID-19 behaviors. Consistently with pre-COVID-19 times, we find that risk tolerance during the UK lockdown (i) was higher in men than in women and (ii) decreased with age. Undocumented in pre-COVID-19 times, we find some evidence for healthier participants displaying significantly higher risk-tolerance for self-reported risk measures. We find no systematic nor robust patterns of association between the COVID-19 risky behaviors and the four risk-taking tasks in our study. Moreover, we find no evidence in support of the so-called “risk compensation” hypothesis. If anything, it appears that participants who took greater risk in real-life COVID-19-relevant risky behaviors (e.g., isolating or taking precautions) also exhibited higher risk-tolerance in our experimental and self-reported risk-taking measures. (shrink)

101 real couples participated in a controlled experimental risk-taking task involving variations in household and individual income risks, while controlling for ex-ante income inequality. Our design disentangles the effects of household risk, intra-household risk inequality, and ex-post payoff inequality. We find that most couples (about 79%) pooled their risk at the household level when risks were borne symmetrically, but a significant proportion of couples (about 36%) failed to do so when individual risks were borne asymmetrically. (...) Additionally, within the scope of the control variables we have utilized, we find that intra-household risk inequality has a larger impact on non-married couples compared to married ones. These results remain robust when the analysis is limited to couples in which both spouses are risk-averse. Lastly, we find that preferences for household efficiency are significantly correlated across both certain and risky situations. However, couples consisting of two income-maximizing spouses do not show greater aversion to risk inequality compared to couples with other compositions. (shrink)

This paper studies the effects of social comparison on risk taking behavior. In our theoretical framework, decision makers evaluate the consequences of their choices relative to both their own and their peers’ conditions. We test experimentally whether the position in the social ranking affects risk attitudes. Subjects interact in a simulated workplace environment where they perform a work task, receive possibly different wages, and then undertake a risky decision that may produce an extra gain. We find that (...) social comparison matters for risk attitudes. Subjects are more risk averse in the presence of small social gain than social loss. In addition, risk aversion is decreasing in the size of the social gain. (shrink)

With a few exceptions, much of epistemology in the last century has been dominated by discussions centered on knowledge, and in particular propositional knowledge (along with associated concepts such as justification, the reliability of cognitive processes, etc.). Recently, attention has been given to other cognitive states such as understanding and wisdom, due in some part to the resurgence of theorizing about intellectual virtues. As with typical epistemic concepts such as justification and knowledge, offering an analysis of wisdom has been difficult. (...) In this paper, I critique a recent attempt to analyze wisdom as risk-taking, and after gleaning from the insights of Thomas Aquinas, I defend a particular version of the wisdom-as-understanding approach. (shrink)

We use variation in corruption convictions across judicial districts in the US to examine the relationship between political corruption and risk-taking of public firms. Firms headquartered in regions with high levels of political corruption have lower total risk and lower idiosyncratic risk on average. Further analysis shows that corruption tends to encourage firms to pursue risk-decreasing investments, lower the riskiness of their operations, and decrease asset liquidity. While managerial ownership is intended to align the interests (...) of managers and shareholders, the presence of corruption appears to encourage undiversified managers to decrease risk-taking. Our evidence is consistent with agency theory and the asset-shielding argument that political corruption discourages managers from taking risks that expose firms to expropriation by politicians, resulting in suboptimal corporate policies. (shrink)

Campbell's analysis of the evolution of human sex differences to include selection pressures on the female is generally welcomed. This commentary raises some specific issues about the evidence cited: the impact of paternal death on survival prospects; a possible mechanism underlying a sex difference in fear; the selective advantage of dominance hierarchies; and the absence of evidence that testosterone causes human aggression.

The present study investigated school counselors’ ratings of the importance of factors in deciding to report adolescent risk-taking behaviors to parents. Turkish school counselors were surveyed. Differences based on gender, years of experience, level of education, attendance of a counseling ethics course, and geographic region were investigated. Mann-Whitney U and Kruskal Wallis tests were used in data analysis. Protecting the student was the highest rated factor. Women and those who took an ethics course rated protecting the student higher (...) than others. Implications for counseling ethics training are discussed, and recommendations for future research are outlined. (shrink)

This research examined whether youth's forecasted risk taking is best predicted by a compensatory (namely, subjective expected utility) or non-compensatory (e.g., single-factor) model. Ninety youth assessed the importance of perceived benefits, importance of perceived drawbacks, subjective probability of benefits, and subjective probability of drawbacks for 16 risky behaviors clustered evenly into recreational and health/safety domains. In both domains, there was strong support for a noncompensatory model in which only the perceived importance of the benefits of engaging in a (...) risky behavior predicted youths' forecasted engagement in risky behavior. The study overcomes earlier methodological weaknesses by fully decomposing participants' assessments into importance and probability aspects for both benefits and drawbacks. As such, the findings provide clear evidence in support of a boundedrationality perspective on youth decision making regarding risk taking. (shrink)

Athletes who wish to compete in spite of high risk of injury can prove a challenge for sports doctors. Overriding an athlete's choices could be considered to be unnecessarily overbearing or paternalistic. However simply accepting all risk-taking as the voluntary choice of an individual fails to acknowledge the context of high-level sport and the circumstances in which an athlete may be being coerced or in some other way be making a less than voluntary choice. Restricting the voluntary (...) choices of an athlete may still be possible but under very limited circumstances. This article explores the ways a sports doctor might respond in ensuring a choice is indeed voluntary and, if so, under what circumstances limits might be placed. Responding to such risk-taking by, for example, limiting the actions of an athlete or assisting them to compete, involves attempting to balance the athlete's aims against some set of ideals of good health or medical ends. (shrink)

When you are indifferent between two options, it’s rationally permissible to take either. One way to decide between two such options is to flip a fair coin, taking one option if it lands heads and the other if it lands tails. Is it rationally permissible to employ such a tie-breaking procedure? Intuitively, yes. However, if you are genuinely risk-averse—in particular, if you adhere to risk-weighted expected utility theory (Buchak in Risk and rationality, Oxford University Press, 2013) (...) and have a strictly convex risk-function—the answer will often be no: the REU of deciding by coin-flip will be lower than the REU of choosing one of the options outright (so long as at least one of the options is a nondegenerate gamble). This turns out to be a significant worry for risk-weighted expected utility theory. I argue that it adds real bite to established worries about diachronic consistency afflicting views, like risk-weighted expected utility theory, that violate Independence. And that, while these worries might be surmountable, surmounting them comes at a price. (shrink)

This paper analyzes nonviolent resistance and direct action, as seen by its practitioners and theoreticians, from the standpoint of trust and risk-taking. After an examination of the nature of trust, the author indicates how it can illuminate what selected figures such as Gandhi and King have claimed about nonviolence. He offers this analysis not as a defense but as a way of understanding nonviolence that can serve as a starting point for further discussion.

Research suggests that people with psychopathic traits experience fear-inducing stimuli differently from others, seeming to interpret fear as more positive and less negative. We expected that this reaction, termed fear enjoyment, would impact the effect of fear-inducing stimuli on self-report risk-taking behaviour. Risk-taking was measured before and after viewing excitement- and fear-inducing videos (N = 825). As expected from research showing that fear induction tends to reduce risk-taking tendencies, participants showed reduced risk-taking (...) scores following a fear-inducing stimulus. Importantly, this relationship was moderated by psychopathic traits. Participants who did not decrease their risk-taking tendencies following the video scored significantly higher on psychopathic traits. Also, some of the variance in the relationship between psychopathic traits and change in risk-taking was partly accounted for by fear enjoyment, suggesting that future research should examine whether fear enjoyment may play a role in the relationship between psychopathy and risk-taking. (shrink)

Risk-taking behavior is particularly widespread during adolescence, and negatively impacts the healthy growth and social adaptation of adolescents. Utilizing problem-behavior theory and the family stress model, the current study examined the relationship between socioeconomic status and adolescents’ risk-taking behavior, as well as the mediating role of psychological capital and self-control. A total of 1,156 Chinese adolescent students completed a series of questionnaires anonymously. The results showed that: Socioeconomic status was negatively correlated with adolescents’ risk-taking (...) behavior; Both psychological capital and self-control mediated the relationship between SES and adolescents’ risk-taking behavior independently; and Psychological capital and self-control also mediated the relationship between SES and the risk-taking behavior of adolescents sequentially. This study reveals the internal mechanism of risk-taking behavior during adolescence and provides theoretical support and empirical evidence for preventing and reducing such behavior in this age group. (shrink)

Discussions of risk taking in the modern business organization frequently focus upon the behavior of individual moral agents. Here I attempt to identify some of the complexities of risk taking when it is a group phenomenon and to do so in such a way as to shed some light upon the ethics of group risk taking in business organizations.

The experience of good fortune and misfortune often reveals itself in the context of risk. We posed the question of whether there are differences between the lucky and the unlucky in perceiving and undertaking risky behaviours, and if these differences constitute predictors of good or ill fortune. A range of instruments were applied in the research to examine groups of lucky and unlucky individuals in respect of their propensity for taking risk, attitudes towards the risk occurring (...) in various domains, the functions of risky behaviours and manner of taking risky decisions depending on the adopted perspective. The research results indicate a number of differences between the differentiated groups. It occurred that the lucky have a greater tendency than the unlucky to take risks, especially in the social and financial domains; they prefer instrumental risk; and they are more flexible in applying perspectives for potential outcomes when making risky decisions. We conclude that the results received can be interpreted in the context of predictors of good and bad luck. (shrink)

Decisions regarding clinical procedures or research participation typically require the informed consent of individuals. When individuals are unable to give consent, the informed permission of a legally authorized representative or surrogate is required. Although many proposed procedures are aimed primarily at benefiting the individual, some are not. I argue that, particularly when individuals are asked to assume risks primarily or exclusively for the benefit of others, family members ought to be engaged in the informed consent process. Examples of procedures in (...) which individuals are asked to assume risks primarily or exclusively for the benefit of others include living organ donation and research participation. (shrink)

Investigating the bases of inter-individual differences in risk-taking is necessary to refine our cognitive and neural models of decision-making and to ultimately counter risky behaviours in real-life policy settings. However, recent evidence suggests that behavioural tasks fare poorly compared to standard questionnaires to measure individual differences in risk-taking. Crucially, using model-based measures of risk taking does not seem to improve reliability. Here we put forward two possible - not mutually exclusive - explanations for these (...) results and suggest future avenues of research to improve the assessment of inter-individual differences in risk-taking by combining repeated online testing and mechanistic computational models. (shrink)

Do pacifists and proponents of justified violence share a starting point? Whether or not just war theory contains an embedded presumption against violence is an important and disputed question. Substantively it is important not only because it has implications for the possibility of dialogue among Christians of different persuasions but also because the belief that the tradition advances no moral reservations about the use of force may have the effect of lowering the moral barriers against the resort to war. Conceptually (...) it is important because it reflects a fundamental methodological disagreement concerning the meaning and resolution of conflicts among moral duties. (shrink)

We hypothesize that CSR serves as a control mechanism to reduce deviations from optimal risk taking, and therefore, CSR curbs excessive risk taking and reduces excessive risk avoidance. Based on the stakeholder theory, firms with CSR focus must balance the interests of multiple stakeholders, and therefore, managers must allocate resources to satisfy both investing and non-investing stakeholders’ interests. Using five measures of corporate risk taking and a sample of 1718 US firms during 1998 (...) to 2011, we find that stronger CSR performance is associated with smaller deviations from optimal risk taking levels. We examine the mechanism through which CSR has an impact on firm value and find a positive indirect impact of CSR on firm value through the impact of CSR on risk taking. CSR performance is positively associated with firm value because CSR reduces excessive risk taking and risk avoidance. (shrink)

Research in empirical moral psychology has consistently found negative correlations between morality and both risk-taking, as well as psychopathic tendencies. However, prior research did not sufficiently explore intervening or moderating factors. Additionally, prior measures of moral preference have a pronounced lack of ecological validity. This study seeks to address these two gaps in the literature. First, this study used Preference for Precepts Implied in Moral Theories, which offers a novel, more nuanced and ecologically valid measure of moral judgment. (...) Second, the current study examined if risk taking moderates the relationships between psychopathic tendencies and moral judgment. Results indicated that models which incorporated risk-taking as a moderator between psychopathic tendencies and moral judgment were a better fit to the data than those that incorporated psychopathic tendencies and risk-taking as exogenous variables, suggesting that the association between psychopathic tendencies and moral judgment is influenced by level of risk-taking. Therefore, future research investigating linkages between psychopathic tendencies and moral precepts may do well to incorporate risk-taking and risky behaviors to further strengthen the understanding of moral judgment in these individuals. (shrink)

In this paper, I argue for an account of wisdom according to which wisdom is a disposition to take appropriate risks. I show why this account should be attractive generally, and also why it should be especially attractive for someone from within the Christian Aristotelian tradition. Finally, I show why the account has certain advantages over an account of wisdom from within the Christian Platonist tradition defended recently by C. Stephen Evans.

Models of risk-taking as used in the social sciences may be improved by including concepts from life history theory, particularly environmental unpredictability and life expectancy. Community college students completed self-report questionnaires measuring these constructs along with several well-known correlates. The frequency of risk-taking was higher for those with higher future unpredictability beliefs and shorter lifespan estimates (as measured by the Future Lifespan Assessment developed for this study), and unpredictability beliefs remained significant after accounting for standard predictors, (...) such as sex and temperament. The results demonstrate the usefulness of applying concepts from life history theory to enhance our understanding of human behavior. (shrink)

Understanding how people behave when facing hazardous situations, how intrinsic and extrinsic factors influence the risk taking (RT) decision making process and to what extent it is possible to modify their reactions externally, are questions that have long interested academics and society in general. In the spheres of Occupational Safety and Health (OSH), the military, finance and sociology, this topic has multidisciplinary implications because we all constantly face risk taking situations. Researchers have hitherto assessed risk (...) taking profiles by conducting questionnaires prior to and after the presentation of stimuli; however, this can lead to the production of biased, non-realistic, risk taking profiles. This is due to the reflexive nature of choosing an answer in a questionnaire, which is remote from the reactive, emotional and impulsive decision making processes inherent to real, risky situations. One way to address this question is to exploit VR capabilities to generate immersive environments that recreate realistic seeming but simulated hazardous situations. We propose VR as the next-generation tool to study risk taking processes, taking advantage of the big four families of metrics which can provide objective assessment methods with high ecological validity: the real-world risks approach (high presence VR environments triggering real-world reactions), embodied interactions (more natural interactions eliciting natural behaviours), stealth assessment (unnoticed real-time assessments offering efficient behavioural metrics) and physiological real-time measurement (physiological signals avoiding subjective bias). Additionally, VR can provide an invaluable tool, after the assessment phase, to train in skills related to risk taking due to its transferability to real-world situations. (shrink)

Many studies claim to measure decision-making under risk by employing the Domain-Specific Risk-Taking (DOSPERT) scale, a self-report measure, or the Balloon Analogue Risk Task (BART), a behavioural task. However, these tasks do not measure decision-making under risk but decision-making under uncertainty, a related but distinct concept. The present commentary discusses both the theoretical and empirical basis of the distinction between uncertainty and risk from the viewpoint of several scientific disciplines and reports how many studies (...) wrongfully employ the DOSPERT scale and BART as risk-taking measures. Importantly, we call for proper distinguishing between (tasks measuring) decision-making under uncertainty and decision-making under risk in psychology and related fields. We believe this is vital as research has shown that people’s attitudes, behaviour, and brain activity differ between both concepts, indicating that confusing the concepts may lead researchers to erroneous conclusions. (shrink)

This book uses the philosophies of Objectivism, rule-utilitarianism, and neo-Aristotelianism to argue that ethical risk-taking is vital for economic flourishing.