The Determination of Risk Attitude: A Reconsideration

Uddin, Kamal (2019) The Determination of Risk Attitude: A Reconsideration. [Dissertation (University of Nottingham only)]

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The purpose of this dissertation is to reconsider the determination of individuals risk attitudes. Within the theoretical debate regarding individuals risk attitude, there have been profound theories proposed to explain such notion. The most important aspect that has been captured in models to explain risk attitude, is the view of Neo-classical economists. They suggest that preference functions for individuals are fixed and hence the choices i.e. the choice of risk attitude aligns to so called preference functions and hence a concept such as risk attitude is discovered. Yet this has been challenged via other researchers such as Becker and Sen whom state preference are not fixed and individual can have preferences over preferences (meta-preferences). This implies individuals have the flexibility to make choices and hence also individuals choosing their risk attitude.

Quite apart from the economics phenomena, an interesting link to the determination of individuals risk attitude is Sartre’s (1948) concept of existentialism. He stated that individuals have flexibility in their choices but also have a moral duty to make such choices. Such choices will reflect what individuals define themselves as or whom they represent. Therefore, this study is seeking to explore such underlying factors that could have value in the perspectives of the determination of individuals risk attitude. Thus, the study is looking to provide insight upon whether individuals risk attitude is chosen or discovered, if it is chosen what factors are chosen by individuals that allows their risk attitude choice to be influence. Lastly, the study is seeking to understand the role existentialism has upon such risk attitude choices and whether the choices correspond to themes such as self-definition/Group membership.

The study concludes that there is a difference between the theory proposed in this study and existing evidence. As the study’s empirical evidence, illustrates risk attitude is chosen and various factors influence individual’s choice. The most noticeable factor affecting individuals risk attitude corresponds as an existentialist factor. Also, it was found that existentialism is key motivation or rationale upon individuals’ choice of their risk attitude.

Item Type: Dissertation (University of Nottingham only)
Depositing User: Uddin, Kamal
Date Deposited: 08 Dec 2022 15:45
Last Modified: 08 Dec 2022 15:45

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