Abstract
Many financial decisions are related to risk. Risk preference is not only an important concept for investment behavior ( chapter 7 ), but also for consumer credit ( chapter 4 ), insurance ( chapter 5 ), pension plans ( chapter 6 ), tax behavior ( chapter 8 ), and becoming a victim of fraud ( chapter 9 ). Risk is experienced by most people as the likelihood of loss. In most cases, risk cannot be established objectively but is perceived risk, depending on people’s interpretation of risk-relevant information. People differ in their risk preference and risk taking, based on personal characteristics and situational factors such as framing.
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© 2016 W. Fred van Raaij
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van Raaij, W.F. (2016). Risk Preference. In: Understanding Consumer Financial Behavior. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137544254_14
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DOI: https://doi.org/10.1057/9781137544254_14
Publisher Name: Palgrave Macmillan, New York
Print ISBN: 978-1-349-71343-1
Online ISBN: 978-1-137-54425-4
eBook Packages: Economics and FinanceEconomics and Finance (R0)