Attitudes towards risk in financial decision making

Doutoramento em Gestão

Risk and attitudes towards risk play a central role in several areas such as economics and psychology. Interestingly, in economics risk attitudes are addressed under the umbrella of the Utility Theory, while in psychology they are measured by psychometric scales. Risk attitudes in financial decision making are here studied under both approaches with the concern of understanding how they are related. So, I propose a conceptual model that explains risk attitudes, I translate to Portuguese the DOSPERT - Domain-Specif Risk- Taking scale and apply it in Portugal and Angola, I measure risk attitudes under Utility Theory and with DOSPERT, in order to bring new insights about their relationship, and I address the link between risk attitude and consumption needs. Among the main contributions, I propose a cause-effect model that helps solving the puzzle of individual inconsistent risk attitudes, I also propose a short version of the DOSPERT scale that can be used in Portugal and Angola, allowing comparisons between them, I report that risk attitudes depend on the consumption need underlying each financial investment decision and that risk attitudes under Utility Theory capture a more intrinsic and global risk attitude that impacts the risk attitude unveiled in each decision as measured by DOSPERT.