Individual Differences in Risk Propensity and Economic Decision-Making: A Study Integrating Prospect Theory and the DOSPERT Scale
(2026) PSYK12 20261Department of Psychology
- Abstract
- According to prospect theory (Kahneman & Tversky, 1979), outcomes are evaluated as gains and losses relative to a reference point, giving rise to systematic patterns of decision-making under uncertainty, including the certainty effect and reflection effect. Yet, individual differences in risk propensity may also influence economic choice, as higher financial risk propensity is associated with greater tolerance for uncertain outcomes and increased engagement in speculative financial behaviour (Lönnqvist et al., 2017; Markiewicz & Weber, 2013; Weber et al., 2002). The present study examined whether the certainty effect and reflection effect described by Kahneman and Tversky (1979) could be replicated in a sample of young adults, and whether... (More)
- According to prospect theory (Kahneman & Tversky, 1979), outcomes are evaluated as gains and losses relative to a reference point, giving rise to systematic patterns of decision-making under uncertainty, including the certainty effect and reflection effect. Yet, individual differences in risk propensity may also influence economic choice, as higher financial risk propensity is associated with greater tolerance for uncertain outcomes and increased engagement in speculative financial behaviour (Lönnqvist et al., 2017; Markiewicz & Weber, 2013; Weber et al., 2002). The present study examined whether the certainty effect and reflection effect described by Kahneman and Tversky (1979) could be replicated in a sample of young adults, and whether risk propensity, measured using the Domain-Specific Risk-Taking (DOSPERT) scale, was associated with risky economic choice behaviour. In total, 125 participants individually completed a survey comprising decision problems derived from Kahneman and Tversky (1979) together with the risk-taking subscale of the revised DOSPERT scale (Blais & Weber, 2006). The results showed that participants were more likely to select risky alternatives when certainty was removed, supporting the certainty effect.Participants also displayed different patterns of risk-taking across positive and negative prospects, consistent with the reflection effect. DOSPERT scores are associated with risky decision-making in certainty-effect problems but did not moderate either the certainty effect or reflection effect. These findings suggest that risk propensity contributes to general differences in risky decision-making, whereas the certainty and reflection effects may reflect broader structural decision biases that operate relatively independently of individual risk propensity. (Less)
- Abstract (Swedish)
- Enligt prospect theory (Kahneman & Tversky, 1979) utvärderas utfall som
vinster och förluster i relation till en referenspunkt, vilket ger upphov till
systematiska mönster i beslutsfattande under osäkerhet, inklusive certainty
effect och reflection effect. Samtidigt kan individuella skillnader i
riskbenägenhet också påverka ekonomiska val, eftersom högre finansiell
riskbenägenhet är associerad med större tolerans för osäkra utfall samt ökat
deltagande i spekulativt finansiellt beteende (Lönnqvist et al., 2017;
Markiewicz & Weber, 2013; Weber et al., 2002). Föreliggande studie
undersökte om certainty effect och reflection effect beskrivna av Kahneman
och Tversky (1979) kunde replikeras i ett urval av unga vuxna, samt om
... (More) - Enligt prospect theory (Kahneman & Tversky, 1979) utvärderas utfall som
vinster och förluster i relation till en referenspunkt, vilket ger upphov till
systematiska mönster i beslutsfattande under osäkerhet, inklusive certainty
effect och reflection effect. Samtidigt kan individuella skillnader i
riskbenägenhet också påverka ekonomiska val, eftersom högre finansiell
riskbenägenhet är associerad med större tolerans för osäkra utfall samt ökat
deltagande i spekulativt finansiellt beteende (Lönnqvist et al., 2017;
Markiewicz & Weber, 2013; Weber et al., 2002). Föreliggande studie
undersökte om certainty effect och reflection effect beskrivna av Kahneman
och Tversky (1979) kunde replikeras i ett urval av unga vuxna, samt om
riskbenägenhet, mätt med Domain-Specific Risk-Taking (DOSPERT) scale,
var associerad med riskfyllt ekonomiskt beslutsfattande. Totalt genomförde
125 deltagare individuellt en enkät bestående av beslutsproblem från
Kahneman och Tversky (1979), tillsammans med risktagningssubskalan från
den reviderade DOSPERT-skalan (Blais & Weber, 2006). Resultaten visade att
deltagarna i högre grad valde riskfyllda alternativ när de säkra togs bort, vilket
gav stöd för certainty effect. Deltagarna uppvisade även olika mönster av
risktagande mellan positiva och negativa prospekt, i linje med reflection effect.
DOSPERT-poäng var associerade med riskfyllt beslutsfattande i problem
avseende certainty effect, men modererade varken certainty effect eller
reflection effect. Dessa fynd tyder på att riskbenägenhet bidrar till generella
skillnader i riskfyllt beslutsfattande, medan certainty effect och reflection
effect kan återspegla bredare strukturella beslutsbias som verkar relativt
oberoende av individuell riskbenägenhet. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/student-papers/record/9234431
- author
- Dordevic, Filip LU ; Binkowski, Emilie LU and Claesson, Emilia LU
- supervisor
- organization
- course
- PSYK12 20261
- year
- 2026
- type
- M2 - Bachelor Degree
- subject
- keywords
- Prospect theory, certainty effect, reflection effect, DOSPERT
- language
- English
- id
- 9234431
- date added to LUP
- 2026-06-16 13:47:02
- date last changed
- 2026-06-16 13:47:02
@misc{9234431,
abstract = {{According to prospect theory (Kahneman & Tversky, 1979), outcomes are evaluated as gains and losses relative to a reference point, giving rise to systematic patterns of decision-making under uncertainty, including the certainty effect and reflection effect. Yet, individual differences in risk propensity may also influence economic choice, as higher financial risk propensity is associated with greater tolerance for uncertain outcomes and increased engagement in speculative financial behaviour (Lönnqvist et al., 2017; Markiewicz & Weber, 2013; Weber et al., 2002). The present study examined whether the certainty effect and reflection effect described by Kahneman and Tversky (1979) could be replicated in a sample of young adults, and whether risk propensity, measured using the Domain-Specific Risk-Taking (DOSPERT) scale, was associated with risky economic choice behaviour. In total, 125 participants individually completed a survey comprising decision problems derived from Kahneman and Tversky (1979) together with the risk-taking subscale of the revised DOSPERT scale (Blais & Weber, 2006). The results showed that participants were more likely to select risky alternatives when certainty was removed, supporting the certainty effect.Participants also displayed different patterns of risk-taking across positive and negative prospects, consistent with the reflection effect. DOSPERT scores are associated with risky decision-making in certainty-effect problems but did not moderate either the certainty effect or reflection effect. These findings suggest that risk propensity contributes to general differences in risky decision-making, whereas the certainty and reflection effects may reflect broader structural decision biases that operate relatively independently of individual risk propensity.}},
author = {{Dordevic, Filip and Binkowski, Emilie and Claesson, Emilia}},
language = {{eng}},
note = {{Student Paper}},
title = {{Individual Differences in Risk Propensity and Economic Decision-Making: A Study Integrating Prospect Theory and the DOSPERT Scale}},
year = {{2026}},
}