An Application to Risk-Taking Behavior

We challenge the prevailing notion that risk taking is a stable trait, such that individuals show consistent risk-taking/aversive behavior across domains. We subscribe to an alternative approach that appreciates the domain-specific nature of risk taking. More important, we recognize heterogeneity of risk profiles among experimental samples and introduce a new methodology that takes this heterogeneity into account. Rather than using a convenient subject pool (i.e., university students), as is typically done, we specifically targeted relevant subsamples to provide further validation of the domain-specific nature of risk taking. Our research shows that individuals who exhibit high levels of risk-taking behavior in one content area (e.g., bungee jumpers taking recreational risks) can exhibit moderate levels in other risky domains (e.g., financial). Furthermore, our results indicate that risk taking among targeted subsamples can be explained within a cost-benefit framework and is largely mediated by the perceived benefit of the activity, and to a lesser extent by the perceived risk. How should researchers study a psychological construct such as risk-taking propensity? Answering this question might not be as easy as it seems at first glance. First, an individual might exhibit risk-taking tendencies in one domain (e.g., financial) but display more conservative behavior in another (e.g., recreational). Second, different methodological designs—for example, the pool of subjects used or the type of analysis conducted—can yield contradicting results (e.g., Huber, Wider, & Huber, 1997). In the present study, our methodological focus on the ecological validity of the experimental design (e.g., Huber, 1997), domainspecific risk-taking measures, and recruitment of participants in targeted groups yielded results that allow us to challenge the tendency to cluster individuals globally as either risk takers or risk avoiders—thus offering a richer perspective on the psychology of risk taking. The psychological literature has been largely dominated by the assumption that risk taking is a stable personality trait, and thus individuals can be clustered into groups having risk-taking or risk-aversive styles (e.g., Eysenck & Eysenck, 1977; Lejuez et al., 2002; for a review, see Bromiley & Curley, 1992). This simplistic, though appealing, conceptualization has proven to be inadequate. Researchers have responded by examining subtraits and, therefore, the relation between risk taking and constructs such as self monitoring (Bell, Schoenrock, & O’Neal, 2000) and sensation seeking (Hansen & Breivik, 2001; Himelstein & Thorne, 1985). In recent years, however, a flourishing corpus of ideas and empirical findings has come to challenge the notion that individuals fit nicely into one of the two categories. Zaleskiewicz (2001) suggested his findings ‘‘confirmed the adequacy of going beyond a simple distinction between risk seeking and risk aversion’’ (p. 113). Indeed, the current zeitgeist among decision researchers seems to include a domain-specific approach to risk. In line with these arguments, Weber and her colleagues have argued that risk taking can be better understood in a risk-return framework, in which risk taking is a function of the perceived risk of the action or choice option, its expected benefits, and the decision maker’s attitude toward perceived risk (Weber, 2001; Address correspondence to Yaniv Hanoch, UCLA School of Public Health, Department of Health Services, Los Angeles, CA 90095-1772, e-mail: [email protected]. PSYCHOLOGICAL SCIENCE 300 Volume 17—Number 4 Copyright r 2006 Association for Psychological Science Weber & Milliman, 1997). Perceptions of risk have been shown to vary by content domain as a function of such factors as familiarity or framing (Blais & Weber, 2001; Mellers, Schwartz, & Weber, 1997), and Weber and Hsee (1998, 1999) have shown that apparent cultural differences in risk taking are mediated by cultural differences in the perception of risks, rather than true attitudinal differences toward risk. The theoretical risk-return trade-off framework and the large body of supporting empirical results served as Weber, Blais, and Betz’s (2002) motivation for developing their domain-specific risk-taking (DOSPERT) scale. This scale allows for an assessment of the relative contributions of individual, group, and domain differences in risk perception, perception of benefits or returns, and attitude toward perceived risk, and the resulting differences in risk taking. In the present study, we used the German version of the DOSPERT scale (DOSPERT-G; see Johnson, Wilke, & Weber, 2004) to provide further support of the notion that risk taking is domain-specific. Our methodology diverged in an important way from the methods in previous research. A growing literature has questioned the use of aggregate analyses to study individual behaviors, showing how such procedures can provide misleading results (Maddox, 1999). However, individual analyses often sacrifice power or introduce unwanted statistical dependencies. As a compromise of sorts, instead of using a heterogeneous group (i.e., university students) and exploring how their scores on a risk scale cluster into categories, we studied distinct but internally homogeneous groups, most of which were chosen precisely because of their extreme risk-taking behavior. Furthermore, we wanted to include a group that would be less likely to engage in domain-specific risky behaviors. To our knowledge, this is the first study to employ a domain-specific approach to investigate populations specifically for their behavioral tendencies. This is an important methodological advance with respect to the selection of experimental participants (who are typically drawn from the same underlying population). We recruited individuals who were known to be risk takers (e.g., sky divers, smokers, and gamblers) or risk avoiders (i.e., gym members) in one domain. Although our study might seem to resemble previous research, such as investigations of stockbrokers’, bankers’, and laypeople’s risk attitudes in the financial domain (MacCrimmon & Wehrung, 1990), ours is the only study to look simultaneously at multiple subpopulations and multiple risk-taking domains. That is, not only did we examine domainspecific behaviors, but we employed ‘‘domain-specific’’ participants, who provided another, novel way to test the validity of the DOSPERT scale (Weber et al., 2002).