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The role of perceived costs and perceived benefits in the relationship between personality and risk-related choices

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  • Soane, Emma
  • Dewberry, Chris
  • Narendran, Sunitha

Abstract

This paper considers how perceptions of costs and benefits can influence the association between personality and risky choice behaviour. We assessed perceptions and behaviours in six domains (ethical; investment; gambling; health and safety; recreational; social) using the DOSPERT and measured personality using the NEO PI-R. Results from structural equation modelling showed that personality had a direct effect on risky choice behaviour in four domains (social, ethical, gambling and recreational risk-taking). In addition, perceived costs and benefits mediated the relations between personality and risk-taking in the five domains (social, ethical, gambling, recreational and investment risk-taking). Evidence for a mechanism that integrates both direct and indirect effects of personality on behaviour is discussed.

Suggested Citation

  • Soane, Emma & Dewberry, Chris & Narendran, Sunitha, 2010. "The role of perceived costs and perceived benefits in the relationship between personality and risk-related choices," LSE Research Online Documents on Economics 28353, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:28353
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    File URL: http://eprints.lse.ac.uk/28353/
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    References listed on IDEAS

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    Cited by:

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    10. Yogita Singh & Mohd. Adil & S. M. Imamul Haque, 2023. "Personality traits and behaviour biases: the moderating role of risk-tolerance," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(4), pages 3549-3573, August.
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    More about this item

    Keywords

    ISI; personality; NEO PI-R; risk; cost; benefit; decision-making;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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