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Attitudes to economic risk-taking, sensation seeking and values of business students specializing in finance

Author

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  • Sjöberg, Lennart

    (Center for Risk Research)

  • Engelberg, Elisabeth

    (Center for Risk Research)

Abstract

Financial decision-making rarely follows models derived from economic theory, which postulate that people are rational economic actors. Psychological alternatives abound. The Tversky-Kahneman heuristics approach is dominating, but it needs to be complemented with emotional and personality factors, since cognitive limitations do not provide exhaustive explanations of the psychology of decision-making. In this paper, attitudes to financial risk-taking and gambling are related to sensation seeking, emotional intelligence, the perceived importance of money (money concern), and over-arching values, in groups of students of financial economics (N=93). Comparative data were collected for a group of non-students. Data on values were also available from a random sample of the population. It was found that the students of finance had a positive attitude to economic risk-taking and gambling behavior, a high level of sensation seeking, a low level of money concern, and gave low priority to altruistic values about peace and the environment. The subgroup of participants planning a career in finance showed an even more pronounced interest in gambling.

Suggested Citation

  • Sjöberg, Lennart & Engelberg, Elisabeth, 2006. "Attitudes to economic risk-taking, sensation seeking and values of business students specializing in finance," SSE/EFI Working Paper Series in Business Administration 2006:3, Stockholm School of Economics, revised 14 Oct 2006.
    • Handle: RePEc:hhb:hastba:2006_003
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    References listed on IDEAS

    as
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    6. Snelbecker, Glenn E. & Roszkowski, Michael J. & Cutler, Neal E., 1990. "Investors' risk tolerance and return aspirations, and financial advisors' interpretations: A conceptual model and exploratory data," Journal of Behavioral Economics, Elsevier, vol. 19(4), pages 377-393.
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    Cited by:

    1. Chhavi Mehta & Neena Sondhi, 2016. "Understanding Indian retail investors' stock investment behaviour: an empirical study," International Journal of Management Practice, Inderscience Enterprises Ltd, vol. 9(1), pages 4-23.

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    Keywords

    Decision making; finance; risk attitude; financial advice;
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