Changing risk-taking: the effects of tasks and incentives on the variability of risk-taking

Figures & data

Figure 1. The research model.

Table 1. Descriptive statistics and bivariate correlations.

Variable	Mean	SD	1	2	3	4	5	6	7	8	9	10
1. Age	26.21	9.11
2. Sex	1.62	.49	−0.21**
3. Understanding of probability	2.23	1.10	−0.24**	−0.07
4. Math competence	3.23	.92	−0.17*	.13	.36***
5. Need for achievement	5.25	.79	−0.11	.10	.06	.15
6. Capped bonus	.33	.47	.21**	.10	.00	−0.04	.12
7. Outcome-adjusted bonus	.34	.48	−0.03	−0.06	−0.01	.07	−0.04	−.50***
8. Task 1 risk-taking	9.20	8.48	.15*	−0.20**	.14	−0.02	.09	.02	−0.09
9. Task 2 risk-taking	9.25	9.71	−0.01	−0.02	.13	.01	.10	−0.03	−0.21**	.51***
10. Task 3 risk-taking	17.79	10.78	−0.10	−0.17*	.23**	.04	.15*	−0.10	−0.00	.36***	.40***
11. Task 4 risk-taking	18.31	12.24	−0.14	−0.06	.26**	.16*	.21**	−0.03	.03	.16*	.26***	.46***

N = 253.

* p<.05.

** p<.01.

*** p<.001.

Table 2. Regression of individual differences, incentive scheme, and risk-taking on subsequent risk-taking.

	Task 2 risk-taking	Task 3 risk-taking	Task 4 risk-taking
Age	−0.06	−0.08	−0.06
Sex	.07	−0.16*	.01
Understanding of probability	.07	.16*	.11
Math competence	−0.02	−0.01	.09
Capped bonus†	−0.15	−0.05	.05
Outcome-adjusted bonus^a	−0.24**	.02	.04
Task 1 risk-taking	.50***	–	–
Task 2 risk-taking	–	.38***	–
Task 3 risk-taking	–	–	.43***
R	.56	.48	.50
R^2	.31	.23	.25
F	10.66**	6.94**	7.91***
Df	7,165	7,165	7,165

* p<.05.

** p<.01.

*** p<.001.

^a The linear bonus scheme is the reference category for the bonus cap and outcome-adjusted schemes.

Table 3. Conditional effects of incentive schemes on the relationship between risk-taking on sequential tasks.

	Task 3 risk-taking	Task 4 risk-taking
Sex	−3.23*	.21
Understanding of probability	1.60*	2.77*
Capped bonus†	1.18	11. 50**
Outcome-adjusted bonus†	6.94**	6.11
Task 2 risk-taking	.61***	–
Task 3 risk-taking	–	.74***
Capped bonus x risk-taking	−0.24	−0.61***
Outcome-adjusted bonus x risk-taking	−0.79**	−0.25
R	.53	.54
R^2	.28	.29
F	9.13***	9.76***
df	7,165	7,165
R^2 increase due to interaction terms	.06	.05
F model with interaction terms	6.39**	6.11**
df model with interaction terms	2,165	2,165

* p<.05.

** p<.01.

*** p<.001.

^† The linear bonus scheme is the reference category for the bonus cap and outcome-adjusted schemes.

Figure 2. The conditional effects of incentive schemes on the relationship between risk-taking on task 2 and task 3.

Figure 3. The conditional effects of incentive schemes on the relationship between risk-taking on task 3 and task 4.

Table

	Probability of failure	Probability of success	Return when failure	Return when success	Expected return
Unit	Percent	Percent	£ millions	£ millions	£ millions
Asset 1	0%	100%	0.0	1.0	1.0
Asset 2	10%	90%	−0.5	2.0	1.8
Asset 3	20%	80%	−1.5	3.0	2.1
Asset 4	30%	70%	−2.5	4.5	2.4
Asset 5	40%	60%	−3.5	6.0	2.2
Asset 6	50%	50%	−4.5	8.0	1.8

Data availability statement

The data that support the findings of this study are available from the corresponding author upon reasonable request.