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Willingness to take risks – The daily blog of behavioral and cognitive economics

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Willingness to take risks – The daily blog of behavioral and cognitive economics

Ralph Hertwig: “We can learn how to deal better with risk”

Our risk appetite influences many of the decisions we make in everyday life, from our choice of career, through to health and money issues. Risk researcher Ralph Hertwig explains what determines our risk appetite and why simple rules of thumb are often more helpful than complex calculations. Mr Hertwig, some people parachute out of planes, others shy away from small changes. Are we inherently willing to take risks or are we risk averse? Most people are rather risk averse. A willingness to take risks is the exception. Financial decision games, for example, show that about two thirds of people tend to avoid risk. However, our risk appetite can change over the course of our life. ….[READ]

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