The Relationship between Psychopathy and Financial Risk and Time Preferences

32 Pages Posted: 23 Apr 2019 Last revised: 5 Jul 2019

See all articles by Corey A. Shank

Corey A. Shank

Dalton State College - Division of Business Administration

Brice V. Dupoyet

Florida International University - College of Business Administration - Finance

Robert B. B. Durand

Curtin University of Technology - School of Economics and Finance - Department of Finance and Banking

Fernando Patterson

North Carolina Central University (NCCU)

Date Written: June 30, 2019

Abstract

We examine the relationship between Psychopathy and its underlying components and financial risk and time preferences in a sample of business majors. We find that overall score on Psychopathy is positively related to the linearity of the cumulative prospective utility function. A breakdown of Psychopathy into its main components shows a more complex relation. For example, one component of Psychopathy, Self-Centered Impulsivity, is statistically significant in models of financial risk preference determinants under Cumulative Prospect Theory. Additionally, we find that two components of Psychopathy - Self-Centered Impulsivity and Stress Immunity - are related to a higher time-preference discount rate under quasi-hyperbolic time preferences.

Keywords: Financial Psychopath, Risk Aversion, Present Bias, Risk Preferences, Time Preferences

JEL Classification: A12, D03, G02, G11

Suggested Citation

Shank, Corey and Dupoyet, Brice and Durand, Robert B. B. and Patterson, Fernando, The Relationship between Psychopathy and Financial Risk and Time Preferences (June 30, 2019). Available at SSRN: https://ssrn.com/abstract=3355774 or http://dx.doi.org/10.2139/ssrn.3355774

Corey Shank

Dalton State College - Division of Business Administration ( email )

Dalton, GA 30720
United States

Brice Dupoyet (Contact Author)

Florida International University - College of Business Administration - Finance ( email )

University Park, RB 209 A
11200 SW 8th Street
Miami, FL 33199
United States
305-348-3328 (Phone)
305-348-4245 (Fax)

Robert B. B. Durand

Curtin University of Technology - School of Economics and Finance - Department of Finance and Banking ( email )

Bentley 6102 WA
Australia

HOME PAGE: http://tiny.cc/y85rh

Fernando Patterson

North Carolina Central University (NCCU) ( email )

Durham, NC 27707
United States

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