Cognitive ability and risk preferences in a developing nation: Findings from the field

Kelishomi, Ali Moghaddasi; Sgroi, Daniel

doi:10.1016/j.econlet.2022.110576

Search citation statements

Order By: Relevance

Paper Sections

Select...

Citation Types

Supporting

Mentioning

Contrasting

Year Published

2023

Publication Types

Select...

Article1

Preprint1

Relationship

Self Cite0

Independent2

Authors

Journals

Cited by 2 publications

References 9 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

The link between cognitive abilities and risk preference depends on measurement

Olschewski,

Rieskamp,

Hertwig

2023

Sci Rep

View full text Add to dashboard Cite

Risk preference is an important construct for understanding individual differences in risk taking throughout the behavioral sciences. An active stream of research has focused on better understanding risk preference through its connection to other psychological constructs, in particular, cognitive abilities. Here, we examine two large-scale multimethod data sets and demonstrate that the method used to measure risk preference is an important moderator. In self-report measures, we found small but consistent positive correlations between working memory capacity/numeracy, facets of cognitive abilities, and risk tolerance. In behavioral measures, we found, on average, no correlation and large intermethod heterogeneity. This heterogeneity can be explained by the choice architecture that is created in behavioral methods—in particular, the relation between risk and reward and the impact of decision error in a task. Consequently, investigating how risk preference relates to psychological constructs such as cognitive abilities require a profound understanding of the choice architecture in measurements of risk preference and in the real world.

show abstract