Risk Attitude

Risk taking is generally considered to be the expression of a personality trait called risk attitude. People are assumed to take a certain amount of risk across a range of situations. Some people are more risk-averse because the uncertainty and potential downside of risky options makes them anxious, while others are more risk seeking because the uncertainty and potential upside of risky options excites them.

Depending on how risk attitude is assessed, the assumption that it is consistent across situations is either true or false. Risk attitude as defined within the expected utility (EU) theory framework can vary greatly across decisions in different content domains and when outcomes are described as gains or losses. Risk taking also depends on how people know about possible decision outcomes ...

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