Engagement on risk and uncertainty – lessons from coastal regions of Fukushima Prefecture,Japan after the 2011 nuclear disaster?

This paper uses the case study of the south-east coast of Fukushima Prefecture in Japan to draw lessons for risk communication under situations of high uncertainty and conditions of varying trust. Based on an existing field of research into the social and ethical aspects of governing risks around environmental radioactivity, empirical qualitative material collected in Fukushima Prefecture over 2014 and 2015 is analysed around three key questions: who is undertaking risk communication and how they are perceived (in particular their motivations and perceived competence); what is the purpose of engagement with citizens and stakeholders on risk and uncertainty (i.e. whether it is to ‘convince’ people or allow them to come to their own informed decision); and whether risk communication may be considered responsive to the needs of the affected populations. The findings are then applied to Kasperson’s four questions for the future of risk communication in order to assess their wider implications. Particular attention is paid to how the individual or institution conveying the risk message is perceived, and in whose interests risk communication is undertaken.     

Risk attitudes and migration experience

Although risk and uncertainty are intrinsic to human migration, there is surprisingly little explicit research on the willingness to take risks in this context. This paper analyses whether migrants are more or less likely than non‐migrants to be risk tolerant, and whether these differences are gendered. Attitudes are explored in terms of responses under conditions of both risk and uncertainty, and self‐assessment of capabilities is also taken into account. The research is based on a sample of students who provide a relatively homogeneous group in socio‐economic terms, and relatively large numbers of individuals with experiences of temporary migration. Their attitudes to risk were assessed under experimental conditions, which measured their willingness to take risks on hypothetical gambles under different conditions. While there are some differences between males and females, and between migrants and non‐migrants, the outstanding finding is the far greater risk tolerance of female migrants as opposed to female non‐migrants, especially when compared to males.     

Factors affecting investment intentions: A consumer behaviour perspective

The purpose of this study is to examine investors’ decision-making from the perspective of a consumer using constructs commonly found in the consumer behaviour field. An investment intentions model incorporating product knowledge, product involvement, risk and uncertainty avoidance, and mediated by perceived risk and uncertainty, was developed and analysed using structural equation modelling. The research found that product knowledge and product involvement had the greatest impact on intentions, suggesting the applicability of these constructs in finance research. Perceived risk was the only mediating construct. The model explained more than 60 per cent of the variation in intentions. A major contribution of this research came from the development of an investment intentions model to examine retail investors’ investment decision-making processes from a consumer behaviour perspective. It helps practitioners to develop a better understanding of the factors that impact on their clients’ intentions to invest in the stock market. This study is the first to include a set of consumer behaviour constructs in an investment intentions model that was not examined before, despite the close relationship between behavioural finance and consumer behaviour that includes elements of psychology and sociology in individual decision-making.     

Beyond Sandler: Risk tolerance and the UK investment deficit

The Sandler report of 2002 found a £27bn shortfall in the UK nation's savings. The report highlights the industry changes necessary for citizens to increase investment for their future and thus reduce this deficit. The mass of this investment activity will take place through high street financial services organisations. Sandler suggests changes in industry-wide structure and practice which will lead to macro changes in generic consumer behaviour. This paper suggests that the marketing departments in financial services organisations can go beyond this and harness ‘risk tolerance’ as a segmentation variable to alter behaviour on a more targeted, micro level. It is suggested that this practice could have an even more profound effect than that envisaged by Sandler. In support of this postulate, this paper presents the results of a research programme into segmentation by risk tolerance within a UK retail financial services organisation.     

Improving the relevance of risk factor disclosure in corporate annual reports

This research develops a model for assessing the quality of risk disclosures and applies the proposed model to four companies in the food production and processing sector. We contribute to the literature by extending prior work on risk disclosure quality using a longitudinal approach to assess the quality of risk reporting. While previous studies have described disclosure practices, this paper adopts a normative approach to disclosure. By suggesting a way of improving risk reporting disclosures, the paper provides guidance for current and future company managers. In line with previous research, this paper identifies certain problems with existing risk disclosures. Results suggest that company managers prefer providing disclosures that are symbolic rather than substantive. We argue that institutional factors and proprietary costs contribute towards and can explain this behaviour. In suggesting a way forward we highlight the role that stakeholders including managers, users, regulators and auditors can play in improving the quality of risk reporting. Flexibility in reporting could be maintained by adopting a properly monitored ‘comply or explain’ approach.     

Non-technical skills for managing risk and performance in financial trading

Recent large-scale failures in financial institutions have been found to be caused, in-part, by human factors-related issues in financial trading. In other environments where risk management and performance are intertwined, a human factors approach is often adopted to understand how the ‘non-technical skills (NTS)’ (leadership (LD), decision-making (DM), situation awareness (SA), teamwork) of organisational actors influence outcomes. Yet, to date, there has been minimal application of human factors research in financial trading. This study (i) identifies ‘real-world’ (i.e. non-laboratory) research studies investigating the NTS important for performance in financial trading, (ii) examines and synthesises data on the NTS found to underpin good or poor performance and (iii) considers the quality and coverage of research investigating NTS in financial trading, and identifies potential areas for future research. Nineteen studies were identified through a systematic literature search and then content-analysed for associations between NTS and performance in financial trading. The review found a range of decision-making (e.g. heuristics and biases, intuitive DM, emotional regulation) and LD skills (e.g. setting standards, monitoring behaviour, encouraging speaking-up) to have been identified as important for managing risk and performance in financial trading environments. Furthermore, SA (e.g. information search and assessment strategies, vigilance, identifying ‘noise’ data) and teamwork (e.g. avoiding ‘role’ conflict, communication between traders) were found to be important, yet remain less explored within the literature, and should be the focus of future research. NTS appear essential for effective risk management within the financial sector, yet further field research is required to examine the context-relevant behaviours that underpin safe activity. This will facilitate the development of evidence-based systems for assessing and training NTS competencies.     

Looking for a safe haven after fancy thrills: a psychometric analysis of risk perception in alpine tourist destinations

Visitors’ risk perceptions have been found to influence the on‐site behaviour of tourists and their intention to return to a destination or to recommend it to others. The present study analyses the perception of tourism risks in the Tyrol, Austria. Building on the psychometric paradigm, participants (N = 207) assessed 15 vacation risks on nine risk characteristics that are derived from psychometric research and completed with characteristics relevant in a tourism context. Findings suggest that additionally to managing the most likely risks, alpine destinations should be prepared to cope with worst case scenarios such as ‘potable water poisoning’, ‘food poisoning’, ‘breaking of an embankment dam’, ‘rock fall on a village’, ‘cable car accident’ and ‘terrorist attack’. Considering these rather low‐probability risks is of decisive importance since such risks are especially prone to evoke public outrage if they – against all expectations – result in damaging events.     

Psychological determinants of financial buffer saving: the influence of financial risk tolerance and regulatory focus

With governments redistributing more responsibilities unto citizens, individuals have an increasing need for financial resources acting as a buffer against life’s setbacks and unexpected expenditures. The purpose of this study was to examine psychological determinants of saving for a financial buffer, for which a theoretical model was formulated based on the theory of planned behaviour with three new, domain-specific psychological constructs: financial risk tolerance, regulatory focus and perceived saving barriers. Data were collected with an online questionnaire that utilised convenience and snowball sampling to target both students and working individuals (N = 272). Regression analyses offered support for the proposed model, showing that participants’ financial risk tolerance (i.e. an individual’s attitude towards financial risk taking) was significantly associated with their subjective financial knowledge and regulatory focus. Furthermore, perceived financial self-efficacy and financial risk tolerance both predicted participants’ intention to save for a financial buffer. In turn, perceived financial self-efficacy and saving intention predicted self-reported saving behaviour. Importantly, perceived saving barriers mediated the relationship between saving intention and self-reported saving behaviour. In line with the proposed model, results also showed that a specific attitude-based construct (financial risk tolerance) is a considerably better predictor of saving intention than general measures of attitude towards saving. This study is also the first to demonstrate that regulatory focus influences financial risk tolerance. Implications of these findings for stimulating saving behaviour are discussed.     

Effects of market returns and market volatility on investor risk tolerance

The 2008 credit market debacle and subsequent “Great Recession” accompanied by the stock market crash of 2008 has caused many investors and their advisors to reevaluate their risk tolerance and investment asset allocation choices. Additionally, marketers for many financial institutions and investment advisors are rethinking the strategies and tactics they use for both individual and corporate clients about the level of risk that is appropriate to meet their investment objectives. This research shows that an investor’s risk tolerance is not as stable as it has been portrayed previously in the literature and can be affected by both the direction of movement and the volatility in the market. In addition, this research provides some suggestions on how to frame investment decisions for individual investors to better assess their actual risk tolerance in the face of a volatile market.     

Preparing for the unknown… unknowns: ‘doomsday’ prepping and disaster risk anxiety in the United States

This article examines the collapse-based thinking energising ‘doomsday’ prepping: a growing American phenomenon centred on storing food, water and weapons for the purpose of surviving disasters. Existing understandings of prepping indicate that its practitioners are driven to prepare by peculiar and delusional certainty that apocalyptic collapse will occur in the near future. This view, however, has not yet been tested by empirical research. This article draws on ethnography with 39 preppers in 18 American states to present a new understanding of this phenomenon, as it shows prepping consistently being practiced in the absence of both apocalyptic predictions and certainty regarding the future occurrence of disaster. Demonstrating that preppers’ activities are undergirded by precautionary projections around numerous non-apocalyptic ‘threats’, the article argues that prepping principally responds to uncertain anxieties around disaster risks. Moreover, it establishes that these imprecise anxieties are regularly influenced by preppers’ consumption of disaster-based speculation in mainstream news media – showing that their concerns tend to emerge in response to numerous disaster risks that are widely reported and recognised in wider American culture, rather than marginal conceptions of ‘threats’. The article, therefore, contends that, rather than being a marginal apocalyptic practice, prepping is a phenomenon with clear, previously unacknowledged links to broader risk communications and concerns in the twenty-first century United States – one that must be understood as a reflection of the broader resonance of disaster-based speculation and uncertainty in this cultural context.     

Communicating the ‘migrant’ other as risk: space,EU and expanding borders

Forced migration and border spaces as fault lines posing risks to society through the notion of ‘Othering’, remain under-explored in risk literature. With Europe facing its biggest humanitarian crisis with forced migration and displacement due to conflict zones, the borders of the European Union have received renewed attention in media. Refugees and the displaced are often depicted as ‘migrants’ and are seen as transgressing borders as illegitimate entities. Although increasing attention has been paid to border patrol and issues of securitization since 9/11, the ‘migrant’ body as ‘risky body’ in political and policy discussions is under-conceptualized and theorized in risk literature. We examine political discourses of the UK Government to discern how the migrant and the expanding borders of the EU are framed as forms of societal and economic risk and equally how these are mitigated with and through the discourse of space and borders. We take a constructionist approach to the ‘migrant’ problem in the EU and UK where risk is socially constructed through political discourse.     

Individual risk tolerance and herding behaviors in financial forecasts

Financial analysts tend to demonstrate herding behavior, which sometimes compromises accuracy. A number of explanations spanning rational economic logic, cognitive biases, and social forces have been suggested. Relying on an experimental setting where participants forecast future earnings from a rich information set, we posit and obtain support for individual risk tolerance (or lack thereof) as an explanatory variable for herding behaviors. Specifically, less risk‐tolerant individuals forecast with less boldness and instead issue forecasts in agreement with the consensus forecast. The results are argued to be at least partially a product of cognitive biases and an intuitive reaction to uncertainty.     

Model averaging in risk management with an application to futures markets

This paper considers the problem of model uncertainty in the case of multi-asset volatility models and discusses the use of model averaging techniques as a way of dealing with the risk of inadvertently using false models in portfolio management. Evaluation of volatility models is then considered and a simple Value-at-Risk (VaR) diagnostic test is proposed for individual as well as ‘average’ models. The asymptotic as well as the exact finite-sample distribution of the test statistic, dealing with the possibility of parameter uncertainty, are established. The model averaging idea and the VaR diagnostic tests are illustrated by an application to portfolios of daily returns on six currencies, four equity indices, four ten year government bonds and four commodities over the period 1991–2007. The empirical evidence supports the use of ‘thick’ model averaging strategies over single models or Bayesian type model averaging procedures.     

Mobile phone masts,social rationalities and risk: negotiating lay perspectives on technological hazards

This paper examines the responses of 37 participants in six focus groups to media representations of the health risks associated with mobile phone masts (‘base stations’) in the light of theoretical debates concerning non‐expert understandings of risks (variously characterised as ‘lay rationality’, lay epidemiology’, popular epidemiology’, ‘public knowledges’, ‘social rationality’ and ‘intuitive risk judgements’). In particular, the study discusses the extent to which two particular manifestations of such understandings – non‐mediated contextual and personal knowledges (‘multiple information sources’), and risk comparisons made between mobile phone masts and a variety of other perceived health risks – are prominent in respondents’ discursive constructions of risk. The paper suggests that analyses of risk responses such as these should differentiate clearly between classes of risks, and avoid suggestions that any particular type of risk response can be unproblematically mapped onto other risk scenarios.     

Individualization revisited: global family developments,uncertainty and risk

Abstract

As part of our special issue appreciating the work of Ulrich Beck, this article introduces and rearticulates his concept of individualization for an audience beyond those engaged with sociological theory. It is argued to be the ‘forgotten half’ of Beck’s approach that is in particular need of both restatement and reaffirmation of its contemporary relevance. It does so by firstly contextualizing and explaining its comparatively limited impact before elaborating the stages of the individualizing process and how his key notion of ‘disembedding without re-embedding’ is distinct from traditional sociological understanding of the individualizing dynamic within modernity. Its relevance and utility is then indicated through surveying developments in family and affective relations in China and America, two of Beck’s ideal types of individualization pattern. Both demonstrate a pattern of radical ‘disembedding’, and a conscious and partial ‘re-embedding’ in the case of the ‘neo-traditional’ American middle-class family. Following this, the article suggests a stronger potential connection between the risk and individualization dimensions of his approach than was drawn out by Beck himself, through focusing upon the uncertainty created by disembedding. The uncertainty that follows from individualization suggests precautionary retreat into security and the construction of risk as a means of embodying and managing uncertainty. Recognition of this social dynamic is potentially more useful in understanding risk than the better-known but very general theory of reflexive modernization that is the other half of Beck’s contribution to risk research.     

Determinants of customer loyalty and share of wallet in retail banking

Previous research has investigated the determinants and consequences of customer loyalty, but, in banking, a critical measure largely neglected in previous studies is the customer's ‘share of wallet’. This study, based on a survey of 1,924 retail banking customers, suggests that a large proportion of the variance in stated behavioural intentions can be predicted, in particular, by customers' attitude measures. More importantly, the study shows that a substantial amount of the variance in share of wallet can be predicted, allowing banks to identify and focus on customer segments where there is most potential for growth. In recognition of the fact that dissatisfied customers are a distinct segment, the study models actual behaviour in terms of share of wallet for dissatisfied customers. Implications for research and for business are discussed.     

Misclassifications in financial risk tolerance

This paper analyses the empirical risk tolerance of individuals and the role of physiological measures of risk perception. By using a test that mimics the financial decision process in a laboratory setting (N?=?445), we obtained an ex-post empirical measure of individual risk tolerance. Predictive classification models allow us to evaluate the accuracy of two alternative risk-tolerance forecasting methods: a self-report questionnaire and a psycho-physiological experiment. We find that accuracy of self-assessments is low and that misclassifications resulting from questionnaires vary from 36 to 65%: individuals asked to self-evaluate their risk tolerance reveal a high probability of failing their judgement, i.e. they behave as risk takers, even if, before the task, they define themselves as risk averse (and vice versa). Conversely, when the risk-tolerance forecast is obtained from individuals’ physiological arousal, observed via their somatic activation before risky choices, the rate of misclassification is considerably lower (~17%). Emotions are confirmed to influence the financial risk-taking process, enhancing the accuracy of the individual risk-tolerance forecasting activity. Self-report questionnaires, conversely, could lead to inadequate risk-tolerance assessments, with consequent unsuitable investment decisions. Bridging these results from the individual to the institutional level, our findings should enhance cautiousness, among regulators and financial institutions, on the (ab)use of risk tolerance questionnaires as tools for classifying individuals’ behaviour under risk.     

Sociocultural vectors of effective risk communication

Kasperson’s reflections on the ‘state of the art’ in risk communication thinking and practice set out an ambitious programmatic vision of how future progress in effective risk communication might be achieved. In this critical but supportive response, I first outline two perspectives on how progress in risk communication might be evaluated. This is followed by some discussion relating these issues to the sociocultural nature of risk communication thinking and practice, and the normative basis of underlying assumptions and ideas of effectiveness. It is suggested that inasmuch as the practical application of effective risk communication requires knowledge of human thinking and behaviour, then further considerations of some sociocultural regularities, contingencies and varieties in risk communication thinking and behaviour within particular contexts should also have practical applications.     

Future roles of business in society: the expanding boundaries of corporate responsibility and a compelling case for partnership

The roles and responsibilities of business in society, in particular global business, are being defined more broadly by an expanding range of stakeholders. This paper aims to review these changes and their implications in order to understand better the likely future expectations of business in society and the way in which leading companies are setting new standards of responsible business practice. It begins by tracing trends within corporate social responsibility debates, and then draws on empirical research and observed stakeholder demands of business, to argue that the boundaries of corporate responsibility are advancing both internally and externally.Internally, these boundaries are changing in terms of the increased responsibility of corporations towards their direct and indirect internal stakeholders. This is shown through innovations in business practice to achieve enhanced social justice in the workplace, improved governance, and more accurate disclosure of non-financial risk. This paper provides a context for this discussion by examining emerging international law, guidelines and voluntary initiatives, regulatory frameworks, and risk review procedures that increasingly seek to redefine corporate responsibility by establishing new norms of best practice and behaviour. These boundaries are also expanding externally, as society increasingly expects global business to work with others to provide solutions to humanitarian crises and endemic problems facing the world. This paper explores how some companies are doing this by applying core competencies in ways that integrate social development and business goals. It suggests, in turn, that the challenges of these expanding boundaries of responsibilities are best addressed through strategic partnerships.This paper concludes that there are new multi-stakeholder convened global governance frameworks evolving that are encouraging businesses of the future to re-invent themselves as a ‘force for positive good’ in society. This involves going beyond the paradigm of simply ‘doing no harm’, and way beyond previous expectations of business as being only about shareholder value. This prediction is supported by examples drawn from the practice of global companies that are already innovating to fulfil this wider role.     

行为视角下的疫情分析:成因、影响与对策综述

本文从流行性传染病特征和医学传染病模型出发,对影响疫情的非理性因素、疫情的直接与间接结果进行文献综述,分析极端事件中的反应不足与过度反应。在成因上,本文梳理了不完全信息贝叶斯学习和显著性理论等决策行为假说,来理解人们行为背后的信息处理机制和情感作用渠道。在结果上,疫情及有关政策对经济金融活动的直接影响尚缺准确评估,恐慌情绪与羊群行为、社会信任危机、风险态度转变及异质性信念等疫情间接结果也有待深入研究。最后,本文基于已有文献和疫情行为分析,对未来学术研究及政策管理提供思路和建议。