Individual Differences in Risk Propensity and Economic Decision-Making: A Study Integrating Prospect Theory and the DOSPERT Scale

Sammanfattning

According to prospect theory (Kahneman & Tversky, 1979), outcomes are evaluated as gains and losses relative to a reference point, giving rise to systematic patterns of decision-making under uncertainty, including the certainty effect and reflection effect. Yet, individual differences in risk propensity may also influence economic choice, as higher financial risk propensity is associated with greater tolerance for uncertain outcomes and increased engagement in speculative financial behaviour (Lönnqvist et al., 2017; Markiewicz & Weber, 2013; Weber et al., 2002). The present study examined whether the certainty effect and reflection effect described by Kahneman and Tversky (1979) could be replicated in a sample of young adults, and whether risk propensity, measured using the Domain-Specific Risk-Taking (DOSPERT) scale, was associated with risky economic choice behaviour. In total, 125 participants individually completed a survey comprising decision problems derived from Kahneman and Tversky (1979) together with the risk-taking subscale of the revised DOSPERT scale (Blais & Weber, 2006). The results showed that participants were more likely to select risky alternatives when certainty was removed, supporting the certainty effect.Participants also displayed different patterns of risk-taking across positive and negative prospects, consistent with the reflection effect. DOSPERT scores are associated with risky decision-making in certainty-effect problems but did not moderate either the certainty effect or reflection effect. These findings suggest that risk propensity contributes to general differences in risky decision-making, whereas the certainty and reflection effects may reflect broader structural decision biases that operate relatively independently of individual risk propensity.