Domain-specific Risk Taking in younger and older adults
Apparent risk taking is determined by multiple factors (Weber & Johnson, 2008). One important decomposition shows it to be a tradeoff between expected benefits and perceived risk. Individual and domain differences in apparent risk taking are typically the result of differences in perceptions of risks (Weber & Hsee, 1998) and benefits (Hanoch et al., 2006) across individuals and domains, while the tradeoff between risks and benefits as perceived (“perceived-risk attitude,” operationalized as the regression coefficient for risk in the subjective risk and benefit regression on likelihood to take a risk) is much more stable across domains and people.
Thus Weber & Hsee (1998) found that differences in financial risk taking between cultures were explained by cultural differences in perceived riskiness of investment options, but not in perceived-risk attitude. Weber, Blais, and Betz (2002) explained both gender and domain differences in risk taking by differences in perceived riskiness, where gender-specific familiarity within a domain resulted in reduced risk perception and thus increased risk taking, without any gender differences in perceived-risk attitude.
In two sets of studies, we examine the effect of age on risk taking and risk perception across five domains, by administering the DOSPERT scale (Weber et al., 2002; Blais & Weber, 2006) to both younger (age 30 and under and older (age 60 and above) adults. We found that older people are less likely to take on risks in all but the social domain, because they perceived the respective risks to be higher and expected benefits to be lower compared with the younger group. Women take less risks than men in general, and they are more influenced by the expected benefits when they take on risks. The Perceived Risk Attitude (PRA) are negative for most of the people, indicating risk-aversion, but younger men have higher risk tolerance (higher PRA) than all other groups.