Renato Frey
University of Basel, Switzerland

Abstract:
Risk preference constitutes a key construct in the behavioral sciences — particularly in economics and psychology — and a plethora of different measures allegedly capturing this construct have been developed by now. Yet, unlike for other major psychological constructs surprisingly little empirical work has been conducted to compare these various measures comprehensively, thus leaving it an open question to what extent risk preference can be considered a broad and stable trait, and whether different measurement approaches (e.g., stated vs. revealed preferences) indeed converge in capturing the same underlying construct. In this seminar, I will present evidence from the Basel-Berlin Risk Study, in which we examined 39 risk-taking measures using a sample of 1,507 participants. Our findings suggest that self-reported propensity measures capture common variance and perform well on several dimensions, whereas different behavioral elicitation methods showed poor consistency and temporal stability. I will discuss potential reasons for the good performance of self-report measures, arguing that they may not merely capture “cheap talk” but tap people’s idiosyncratic past experiences, and I will highlight the importance of testing the various measures’ predictive validity in future research.

Renato Frey is a cognitive psychologist studying how people make decisions under risk and uncertainty. His research focuses on the construct of risk preference and addresses question such as: How stable is a person’s risk preference across different situations and time? How can we best measure the cognitive processes underlying risk preference and interindividual differences therein? And to what extent is risk preference predictive for how people deal with the daily risks of our modern world? To this end, he uses quantitative methods (psychometric, cognitive, and predictive modeling) and implements both lab experiments and ecological assessments. After receiving his PhD from the University of Basel, Renato spent two years as a postdoctoral researcher at the Max Planck Institute for Human Development in Berlin and six months as a visiting research associate at Princeton University. He is currently a researcher at the Center for Cognitive and Decision Sciences (University of Basel) and a Swiss National Science Foundation Ambizione fellow.

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Venue
Department of Management, Economics and Industrial Engineering
Building B26/B – Room 0.2 – ground floor
Via Lambruschini 4/B, Milano