The psychological drivers of self-reported risk preference

Why are some people more willing than others to take risks? While behavioral tasks (e.g., monetary lotteries) are often regarded as a gold standard for capturing a person’s risk preference, recent studies have found stated preferences (e.g., responses to hypothetical scenarios) to exhibit higher reliability, convergent validity, and test-retest stability. Yet, little is known about the psychological drivers of stated preferences. Central to the stated preference approach, the psychological risk-return model conceptualizes a person’s propensity to engage in an activity or behavior as a tradeoff between their risk perceptions and expected benefits. To cast a light on the psychological drivers of risk preference within the psychological risk-return framework, in a series of studies participants reported how they evaluated the risks and benefits of activities and their propensity to engage. Individual differences in analytic and intuitive thinking dispositions were also measured. Some participants referred explicitly to risks and rewards of activities when deriving their risk propensity, which was associated with sensitivity to their risk perception and expected benefit ratings. Associations with thinking dispositions indicated that participants who considered risks and rewards were more disposed to analytic thinking. Participants’ reports also revealed a broad repertoire of psychological drivers (e.g., intuition, imagination, feeling) of their evaluations of activities. These were stable over time, associated with thinking dispositions, and influenced their risk preference. The findings provide support for the psychological risk-return model of risk preference. A multifaceted model of preference is urged by the findings to acknowledge the multiple co-occurring psychological drivers of risk preference.