EFFECTS OF COGNITIVE APPRAISAL PATTERN ON PROBABILITY WEIGHING FUNCTION AND RISK BEHAVIOR BETWEEN GENDERS
Abstract
The paper sets out to explore the effect of manipulating the appraisal dimensions, controllability and certainty, which was induced by emotions fear and anger, on probability weighting of a risky prospect between genders. By targeting the risk perception dimensions; subjects’ perception on the controllability and certainty of a situation were investigated. The experimental subjects were then asked to make choices in a lottery game. The results showed that high controllability and certainty dimensions could mitigate over-reaction to probability of losing among women. However, we found no effect of the two dimensions on men. Past studies have shown women were emotionally more sensitive and tend to overweigh probability of losing higher than men. This misperception of probability has large consequences on income discrepancy, risk tolerance and investment decisions between genders. This paper showed manipulating the controllability and certainty dimensions when faced with a risky choice could mitigate the misperception of risk.
Keywords: Risks; Appraisal Dimensions; Probability weighing; Lottery; Experiment.
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