A Critical Perspective on the Conceptualization of Risk in Behavioral and Experimental Finance

7 Pages Posted: 1 Apr 2021

See all articles by Felix Holzmeister

Felix Holzmeister

University of Innsbruck - Department of Economics

Christoph Huber

University of Innsbruck

Stefan Palan

University of Graz

Date Written: March 31, 2021

Abstract

Risk is one of the key aspects in financial decision-making and therefore an integral part of the behavioral economics and finance literature. Focusing on the conceptualization of the term "risk", which researchers have addressed from numerous angles, this comment aims to offer a critical perspective on the interactions between risk preferences (a latent trait), risk perceptions (how individuals judge whether something is risky), and risk-taking behavior as distinct concepts, and hence to guide future research on (individual-level) decision-making processes in this direction.

Keywords: risk-taking behavior, risk preferences, risk perception

JEL Classification: D81, D91, G41

Suggested Citation

Holzmeister, Felix and Huber, Christoph and Palan, Stefan, A Critical Perspective on the Conceptualization of Risk in Behavioral and Experimental Finance (March 31, 2021). Available at SSRN: https://ssrn.com/abstract=3816460 or http://dx.doi.org/10.2139/ssrn.3816460

Felix Holzmeister (Contact Author)

University of Innsbruck - Department of Economics ( email )

Universitaetsstrasse 15
Innsbruck, 6020
Austria

HOME PAGE: http://www.holzmeister.biz

Christoph Huber

University of Innsbruck ( email )

Universit├Ątsstra├če 15
Innsbruck, Innsbruck 6020
Austria

Stefan Palan

University of Graz ( email )

Universitaetsstrasse 15/F2
Graz, 8010
Austria
+433163807306 (Phone)

HOME PAGE: http://academic.palan.biz

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