Preference or ability: Exploring the relations between risk preference, personality, and cognitive abilities

Abstract

Key issues in the behavioral sciences are if there exist stable risk preferences that generalize across domains and if these are best measured by revealed risk preference (RRP) in behavioral decision tasks or by surveys eliciting stated risk preference (SRP). We applied network analysis to data from a representative Swedish sample to investigate the relations between RRP, SRP, personality characteristics, and cognitive abilities, using in total over 70 measurements. The results showed that different measures of RRP were poorly intercorrelated and formed a community together with measures of numerical and cognitive abilities. Measures of SRP were weakly correlated with measures of RRP and identified in a distinctly separate community, along with personality characteristics and gender. The ensuing analyses provided support for a model suggesting that RRPs are contaminated by demands on numerical and cognitive abilities. RRPs may thus suffer from poor construct validity, whereas SRPs may better capture people's everyday risk preferences because they are related to more stable traits.

Fear and anxiety in the face of COVID-19: Negative dispositions towards risk and uncertainty as vulnerability factors

“…Although some intraindividual variability exists across various domains of life, giving rise to domain-specific risk preferences (e.g., Weber, Blais, & Betz, 2002 ; Frey, Duncan, & Weber, 2020 ), an increasing amount of evidence suggests that people may also have relatively domain-general risk preferences (e.g., Frey et al, 2017 ; Highhouse, Nye, Zhang, & Rada, 2017 ; Zhang et al, 2019 ). Specifically, despite that various “risk-taking measures” are quite diverse and may vary in the extent to which they focus on risk as outcome variance (i.e., economic definition) versus risk as a threat (i.e., clinical definition), empirically there is a considerable convergence across measures – at least across different self-reports, but not necessarily across different behavioral tasks (for possible explanations for this observation, see Millroth, Juslin, Winman, Nilsson, & Lindskog, 2020 ; Steiner & Frey, 2021 ; Steiner, Seitz, & Frey, 2021 ).…”

“…Moreover, people’s general risk preferences (which is often also referred to as risk attitude, or when framed inversely as in the current article, as risk aversion ) are considerably stable across time (e.g., Frey et al, 2017 ), and to some extent even appear to be genetically determined ( Linnér et al, 2019 ). Finally, whereas people’s general risk preferences show systematic associations with some sociodemographic variables such as gender (females being more risk averse; Frey et al, 2021 ), there exists ample interindividual variability even within subgroups; this variability is captured particularly well by self-report measures, which were found to reflect reliable and diagnostic signals ( Frey et al, 2017 ; Millroth et al, 2020 ; Steiner & Frey, 2021 ; Zhang et al, 2019 ).…”

Representative Design in Psychological Assessment: A Case Study Using the Balloon Analogue Risk Task (BART)

“…Such improvements are much needed in various areas of behavioral research (cf. Frey et al, 2017;Lauriola et al, 2014;Lönnqvist et al, 2015;Millroth, Juslin, Winman, Nilsson, & Lindskog, 2020)-for instance, when investigating the functional neural architecture of risk taking in neuroimaging studies (e.g., Schonberg et al, 2012Schonberg et al, , 2011Tisdall et al, 2018).…”

Personality Profile of Risk Takers: An Examination of the Big Five Facets

“…Future research should adopt a mix-method approach such as peer-reports or alternative measures of risk propensity. Though, researchers should exercise caution when using laboratory 15 measures, as they may not capture the same underlying constructs as self-report measures of risk taking (Millroth et al, 2020;Pedroni et al, 2017).…”