An investigation into risk propensity in bull and bear markets |
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Authors: | John Garvey |
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Institution: | 1. Kemmy Business School , University of Limerick , Castletroy, Limerick, Ireland john.garvey@ul.ie |
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Abstract: | This paper addresses the primary contribution of prospect theory against the landscape of an individual’s self‐attributed risk propensity. Risk propensity is captured using the IPI psychometric questionnaire for a sample of 521 participants. Participants are also presented with probability‐based decisions, that are framed as both negative and positive prospects. Results show that personality constructs, specifically risk‐taking, become a consistent and emerging factor in decision‐making within the positive domain. In the negative domain, personality constructs associated with risk become more muted and are less likely to be a factor in decision‐making. |
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Keywords: | risk propensity decision‐making prospect theory |
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