Page 267 - RISK Management IC 86

The risk averter, for example, can be described in terms of a utility
curve that is convex from above when measuring his attitudes toward
wealth or income. He may be described in terms of his penchant for
cash and his risk may be described in terms of the rate at which he
capitalizes a given income stream expected from an investment. Risk
takers will tend to exhibit opposite characteristics from risk averters.
some success has been achieved in identifying risk preference in
economic terms ; however, economists generally have not considered
types of risk other than financial risk in their analysis.

Risk and insurance management society, inc., New York (RIMS) :
Organisation for risk and insurance managers of commercial and
industrial enterprises, public entities and service organizations in both
the profit and non-profit sectors.

Risk and political science :
Risk is an important element in describing the basic development of
society, which may itself be viewed as a risk-handling device. The
more elaborate and structured a given society is, the more likely it is
that persons within the society will exhibit risk aversion as an indi-
vidual trait. However, this hypothesis can only be supported within
direct evidence.

Risk and psychology :
Psychologists have directed their efforts in identifying and measuring
risk attitudes by studying personality variables. Other than financial
risk, they have identified social or physiological risk. They have
studied the degree of consistency of risk behavior across different
variables and have analyzed and contrasted group versus individual
risk attitudes. The risk averter is described in psychological terms as
one who has a low need for achievement and whose life experience
tends to show a lack of interest in activities commonly identified with
the masculine role (through sports, dangerous or daring activities, and
the like).

The risk averter also exhibits a relatively high degree of ambivalence if
the type of risk concerned is either physical or social. This same
individual, however, may well be willing to take relatively high financial
risk. This finding emphasizes the need for distinguishing different
types of risk before attempting generalization. Psychologists have
also shown threat different measures or risk do not always agree with
one another when tested on the same group or subjects. Thus, peer
evaluation may not agree with other measures of risk. Group
discussion has shown to have the effect of increasing the degree of
individual willingness to take risk.

Group discussion tend to be riskier than decisions that would have
been made independently by an individual member of the group. The
popularity of the committee in business and social life may be

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