SSE/EFI Working Paper Series in Business Administration
No 2006:3:
Attitudes to economic risk-taking, sensation seeking and values of business students specializing in finance
Lennart Sjöberg ()
and Elisabeth Engelberg ()
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.
Keywords: Decision making; finance; risk attitude; financial advice; (follow links to similar papers)
30 pages, March 31, 2006, Revised October 15, 2006
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