A widespread view concerning financial decision-making is that women are more riskaverse than men. A consequence of this stereotype is statistical discrimination which diminishes the success of women in financial and labor markets. The perception that female managers are less risk-prone than men has been put forward as a major cause of ''glass ceilings'' in corporate promotion ladders (Johnnie E. V. Johnson and Philip L. Powell, 1994). Women are less trusted than men to make the risky decisions that may be necessary for a firm's success. Anecdotal evidence from financial markets suggests that similar stereotyping by investment brokers is possibly to the disadvantage of female clients. Women are expected to be more conservative investors than men and are consequently offered investments with lower risks and therefore lower expected returns (Penelope Wang, 1994).Given that preconceptions concerning the risk propensities of men and women seem to affect their economic success, it is important to examine whether the above stereotype reflects actual economic behavior. There is some evidence supporting the view that women are more risk-averse than men in financial decision-making. Recent survey data suggest that wealth holdings of single women are less risky than those of single men of equal economic status (, 1998). Also, when asked about their attitudes toward financial risks, women seem to report a lower risk propensity than men (Robert B. Barsky et al., 1997). Finally, experimental evidence suggests that women may be more risk-averse than men toward gambles (Irwin P. Levin et al., 1988). It is questionable, however, whether stereotypic risk attitudes can be confirmed by the above survey and experimental evidence. First, in survey data, gender-specific risk attitudes may be confounded with differences in individual opportunity sets. Survey studies of individual wealth composition provide only weak control for gender-specific information on choice options and gender-specific wealth constraints in the underlying financial decisions.Second, behavior in abstract gambling experiments may not correspond to risk behavior in contextual decisions, as has been shown by John Hershey and Paul J. H. Schoemaker (1980). Thus, while abstract gambling experiments provide strong control of the economic environment surrounding risky decisions, their data may not be adequate for drawing conclusions on gender-specific risk attitudes of investors and managers.The objective of the study reported here is to circumvent the above problems in analyzing gender-specific risk attitudes. We conducted an experiment in which subjects not only made abstract gambling decisions, but were also confronted with financially motivated risky decisions embedded in an investment or insurance context. The implementation of such contextual decisions allowed us to examine gender-specific risk propensities in contexts which may be relevant to financial and labor markets. At the same time, compared to survey 382 AEA PAPERS AND PROCEEDINGS MAY 1999TABLE 1-EXPERIMENT...

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWomen are commonly stereotyped as more risk averse than men in financial decision making. In this paper we examine whether this stereotype reflects actual differences in risk taking behavior by means of a laboratory experiment with monetary incentives.Gender differences in risk taking may be due to differences in subjects' valuations of outcomes or to the way probabilities are processed. The results of our experiment indicate that men and women differ in their probability weighting schemes; however, we do not find a significant difference in the value functions. Women tend to be less sensitive to probability changes and also tend to underestimate large probabilities of gains to a higher degree than do men, i.e. women are more pessimistic in the gain domain. The combination of both effects results in significant gender differences in average probability weights in lotteries framed as investment decisions. Women's relative insensitivity to probabilities combined with pessimism may indeed lead to higher risk aversion.JEL classification: D81, C91, C92

Purpose -This paper seeks to show optimal strategies for firms to cope with analysis and management of risks. Design/methodology/approach -Empirical and experimental studies on gender differences in risk analysis and risk management are reported and assessed. Findings -Women appear less sensitive to probabilities and more pessimistic towards gains than men. In risk management, women seem to have a comparative advantage with respect to diversification and communication tasks. Research limitations/implications -Empirical testing of the hypothesis that mixed teams of senior managers optimize risk analysis and management is still missing. Deeper insights into the optimal structure of men's and women's cooperation with respect to risk analysis and management are missing. Practical implications -A well established cooperation of men and women at the senior management level appears recommendable for firms which strive for an optimization of their risk analysis and risk management. Furthermore, such cooperation is desirable with respect to a society's perspective. Originality/value -Identification of gender differences in risk analysis and management are pointed. Such differences matter since analysis and management of risk are decisive issues for firms.

How does risk tolerance vary with stake size? This important question cannot be adequately answered if framing effects, nonlinear probability weighting, and heterogeneity of preference types are neglected. We show that the increase in relative risk aversion over gains cannot be captured by the curvature of the utility function. It is driven predominantly by a change in probability weighting of a majority group of individuals who exhibit more rational probability weighting at high stakes. Contrary to gains, no coherent change in relative risk aversion is observed for losses. These results not only challenge expected utility theory, but also prospect theory.

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