Risk Preferences in Future Military Leaders

37 Pages Posted: 19 Oct 2017

See all articles by Patrick Bell

Patrick Bell

United States Military Academy, West Point - Department of Social Sciences

Rozlyn Engel

U.S. Department of the Treasury

Darren Hudson

Texas Tech University

Julian C. Jamison

University of Exeter Business School - Department of Economics; World Bank eMBeD (Mind, Behavior, and Development); Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL); Innovations for Poverty Action

Bill Skimmyhorn

Mason School of Business, College of William & Mary; U.S. Army Office of Economic and Manpower Analysis

Date Written: March 1, 2017

Abstract

Although hundreds of studies have demonstrated that risk preferences shape people’s choices under uncertainty, the complexity of how attitudes toward risk play out across various pivotal settings and key populations leaves considerable gaps in knowledge. We study a unique sample of a cohort of future military leaders at the United States Military Academy (West Point), nearly all of whom now hold commissions in the US Army officer corps. Using a hypothetical instrument to elicit preferences across a variety of domains, we find that cadets are risk averse, on average, which has potentially important implications for future management of military conflicts and programs. Our results also show that diversity programs aimed at increasing the number of women and minorities at West Point are likely to increase the average level of risk aversion within the officer corps. This finding suggests that working with officers to strengthen cognitive flexibility and to be attuned to a possible wedge between their innate preferences and the needs of the situation may be important, particularly for those who wish to enter occupational fields where the willingness to take risks is critical.

Keywords: risk preferences, risk aversion, uncertainty, occupational risk, leadership

JEL Classification: C83, C91, D12, D14, D81, G11, I12

Suggested Citation

Bell, Patrick and Engel, Rozlyn and Hudson, Darren and Jamison, Julian C. and Skimmyhorn, William, Risk Preferences in Future Military Leaders (March 1, 2017). Available at SSRN: https://ssrn.com/abstract=3055387 or http://dx.doi.org/10.2139/ssrn.3055387

Patrick Bell

United States Military Academy, West Point - Department of Social Sciences ( email )

West Point, NY
United States

Rozlyn Engel

U.S. Department of the Treasury ( email )

Darren Hudson (Contact Author)

Texas Tech University ( email )

Box 42132
Lubbock, TX 79409-2132
United States

Julian C. Jamison

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, EX4 4RJ
United Kingdom

World Bank eMBeD (Mind, Behavior, and Development) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

30 Wadsworth Street, E53-320
77 Massachusetts Avenue
Cambridge, MA 02142
United States

Innovations for Poverty Action ( email )

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

William Skimmyhorn

Mason School of Business, College of William & Mary ( email )

Williamsburg, VA
United States

HOME PAGE: http://https://mason.wm.edu/faculty/directory/full-time-faculty/skimmyhorn_w.php

U.S. Army Office of Economic and Manpower Analysis ( email )

West Point, NY
United States

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