Would “I” be more risk averse? : the effect of “I” on risk preference

• Main Authors: Nishanthi, Nur Fitriah Alias, Chua, Hang Ping
• Other Authors: School of Humanities and Social Sciences
• Format: Final Year Project
• Language: English
• Published: 2016
• Subjects: DRNTU::Social sciences
• Online Access: http://hdl.handle.net/10356/66379
• Institution: Nanyang Technological University

Linguistic elements have been studied quite extensively in behavioural economics as it plays a crucial role in determining economic behaviours. Despite risk preferences being one of the most important components of economic behaviour, little research attention has been done to link linguistic elements with risk preferences. Risk preference research is abundant, but, many ignore the possibility that the structure of the sentence itself or the linguistic variables could have a vital role in manipulating and influencing one’s risk preference. This report aims to thus identify how linguistic variables, specifically the use of pronoun could affect individuals’ risk taking behaviour. This was done through an experiment which encompasses two different treatments for the same choices. One treatment consists of a series of 13 decision rows for each of the 12 rounds containing the pronoun “I”, while the second treatment has no pronoun in it. Mann-Whitney U test and regression results showed that subjects who were presented with the pronoun “I” treatment made more safe choices as compared to those in the non-pronoun treatment. The treatment effect may be due to individuals perceiving their connection with the consequences of their decisions in a more profound way. These significant results give a further understanding and enlightenment of how the manipulation of pronoun could have a direct impact on influencing individuals’ risk behaviour.