Risk theories typically assume individuals make risky choices using probability weights that differ from objective probabilities. Recent theories suggest that probability weights vary depending on which portion of a risky environment is made salient. Using experimental data we show that salience affects young men and women differently, even after controlling for cognitive and non-cognitive skills. Men are significantly more likely than women to switch from a certain to a risky choice once the upside of winning is made salient, even though the expected value of the choice remains the same.
Booth, Alison L. (Australian National University)
Nolen, Patrick J. (University of Essex)
Paper here.
Maybe that’s why women register less patents?
“Risk theories typically assume individuals make risky choices using probability weights that differ from objective probabilities.”
I think this needs to be slightly updated to read: “Risk theories thought of by economists, and probably only economists, and not even all of them (e.g., that Nobel prize winner Kahneman), assume…”. Not surprisingly, the idea that men take bigger and stupider risks than women (in any number of areas, such as gambling, driving, playing games,…..) when given the opportunity is not exactly the alternative hypothesis people would generally use, and nor would be the suggestion that many people don’t generally sit there working out all of the probabilities of everything when making many risky decisions (as Herb Simon pointed out in 1956).
Another economics paper thumping the “women are more risk averse” tub.
Women have been known to get married. With enthusiasm. In all culutures, for maybe the last million years, they have been leaving the safety of their father’s house and putting their lives on the line. Everyone knows the risk is huge. People are in tears at the wedding.
But economics researchers know women are risk averse. They know it for sure and these bright sparks have confirmed it with an experiment using first year English economics students.
I reckon you’re onto something Mike — the main examples I know of where women take more risks than men we don’t really consider “risks” — women are more likely to initiate divorce more than men, for example, but we don’t talk about that as a risk in the same way as we talk about, say, gambling risks. However, it certainly is a risk.
I didn’t think of it until I saw Mike,Pepperday’s comment above but I gave previously thought that if behaviouralism and economics had any ethics at all they would ban all experiments on volunteer college students that weren’t directed to the study of volunteer-minded college students.
“women are more likely to initiate divorce than men”
Interesting – what else? Does it seem to you (as it does to me) that men are more ready to take on material risk and women are more ready for social risk?
Men risk not only wealth but their bodies. For example, there is virtually no social downside in going to war and infinite upside. They are leery of marriage for there is little social upside but big potential downside.
Women are very cautious about risking their bodies. You never see a girl on a skateboard, for instance.
The ones I have seen or heard about in talks are mainly to do with personal relationship and children type things (I will have to really strain my grey cells to try remember the absolute specifics unfortunatley). However, one I can remember that is rather general (more so than divorce initiation) and which a quick search confirms is that in Western countries, women tend to want more children than men (excluding crackpot numbers, e.g., people wanting 5 or more children — and the differences can be quite reasonable). I think that extends to IVF usage in Australia even though it’s a fairly invasive technique (i.e., women are more willing to have it even if their partner is undecided). Having children is obviously a health risk incidentally, so this shows that women are willing to risk their bodies in some circumstances that they could avoid for no cost (apart from not having children), including circumstances that are out of the ordinary and have a high risk of failure (i.e., IVF).
Mike, in terms of the payoff of children, which conrad suggests women want more of, getting married provides a positive probability of children versus a certain payoff of zero from staying at home. Getting married is not risk seeking – it’s optimisation.
Jason — I don’t see what the difference between optimization and risk seeking is — arn’t they two processes in the same chain ? i.e., people “optimize” their behaviour according to certain criterion and then this drives the probability they will take risks? (note that I use optimize here simply to suggest that behavior can be caused by multiple things, not something that is mathematically optimum).
If you are assuming here that things that are statistically positive (not necessarily the case in marriage incidentally if you just look at happiness averages), then if there is a difference between men and women in terms of the risks involved in having children (which, at least in terms of physical risk, is pretty clear), then getting married and hence increasing your probablity of having children is obviously multiplying the risk. I’m not sure of what the gender differences are in terms of attitudes to marriage, but if women to get married more than men, then this would also go against the idea of women taking less risks than men.
Conrad, I probably should have chosen a word other than optimisation, but my point is that in terms of children, the stay at home option has a guaranteed payoff that is the same as the lowest potential outcome from getting married. Even a risk averse person would take that bet. The same argument can be applied to the physical risks from childbirth.
On your experiment, in the absence of gay marriage, men and women engage in the same number of marriages (on average). Men have larger variance in the number of marriages as some men at the bottom of the tree miss out and those at the top monopolise more than one woman for their fertile years – which is an evolutionary rationale for risk seeking behaviour for men. Low parental investment gives a man the potential to have many more children than a woman can feasibly have.
One measure where men are clearly the risk takers is in allocating resources to children. Women are sure of who the child’s mother is. Men have no such luxury.
First of all, it isn’t payoff you should be thinking about, it’s just the difference between men and women, so whether having children happens to be a positive thing that people often get married for is neither here nor there for the argument. If children are a positive thing, then obviously men and women should want them, but that doesn’t differentiate why men and women have different attitudes to getying married/having children.
“…Low parental investment gives a man the potential to have many more children than a woman can feasibly have.”
All of this might well be true, but it should favour men wanting more children than women since the cost of having them is obviously less for men than women. I.e., the risk is more for women.
“One measure where men are clearly the risk takers is in allocating resources to children. Women are sure of who the child’s mother is. Men have no such luxury.”
Alternatively, women have to endure pain, often surgery, and until recently a high chance of death. Call me a risk averse wimp, but I know which I’d rather prefer.
The payoff is how risk aversion is defined. You can only mount an argument that women are less risk averse or more risk seeking if you can show me a domain where they take risks that men would not. I am not sure the marriage or children example is very fruitful as men and women cannot face the same calculations by the very nature of the problem. Further, as I noted above, the example given concerning marriage is not risk seeking behaviour.
On preferences for children, men have a stronger preference for quantity and variety of sex (as parental investment theory predicts).
And don’t confuse risk preferences with wanting to reduce costs. I am sure women would also prefer a painless and surgery free birth. That is just not the offering on the table.
“I am not sure the marriage or children example is very fruitful as men and women cannot face the same calculations by the very nature of the problem”
Perhaps these are the interesting examples. I hadn’t really thought about them as risky behavior in the sort standard sense until Mike pointed it out, but I think they surely are. Perhaps the difference is really that risk taking behavior that males exhibit more than females is simply easier to quantify.
“On preferences for children, men have a stronger preference for quantity and variety of sex (as parental investment theory predicts).”
What has this got to do with wanting children?
“as parental investment theory predicts”
Parental investment theory works well for some things (notably non-humans) but it fails to predict many different things in human behavior (e.g., why families spend so much time and effort helping disabled children that will never be able to have children, quite unlike non-humans) so I’m not really sure bandying it around is very useful in this context.
“And don’t confuse risk preferences with wanting to reduce costs.”
Risk preferences are presumably calculated based on the cost of doing something in some circumstances, so again, I’m not sure why you treat these as separate.
Presumably all people take risks for a pay-off. Perhaps it is that men prefer to take risks for a material pay-off; women take risks for a social pay-off. Or perhaps it is that certain activities are weighted differently for men and women. Marriage for example.
A woman takes a big personal risk in getting married. But it carries little social risk for her. There is a big potential social pay-off: social respectability and children. Maybe even better if she has male children.
A man takes a social risk in marriage. There are expectations of a husband that a bachelor is free of. There is little social pay-off. Bridegrooms are not evolutionary psychologists: no one thinks fathering a child is an achievement. What if he can’t support the children? That is a big social black mark. On the other hand he will get little credit for supporting them – just nagging criticism for any failings.
I’m sorry, what risk is a woman undertaking by getting married? All the risks are taken by the husband.
All Romney needs to do is take the soundtrack from the “beef, it’s what’s for dinner” commercial and make an ad for the Southern/rural areas, and he’ll be great.