Perceived Autonomy Increases Risk Tolerance

Abstract

Three experiments explored the role of perceived autonomy in preference for risky gambles. A scenario about betting at a horse race manipulated whether or not decision makers could make an incidental choice about the gamble they received or about features of the race track experience. These manipulations maintain experimental control over the risky gamble each participant was assigned to evaluate. Under low autonomy, participants evaluated certain outcomes more favorably than risky gambles with the same expected value. In contrast, under high autonomy, participants evaluated risky gambles similarly to certain outcomes. This effect of autonomy was more pronounced for higher risk levels. Thus, high perceived autonomy increases tolerance for risk.

Keywords: autonomy, risk preference

JEL Classification: D03