A Sensemaking Perspective of Financial Risk Tolerances

Research output: Contribution to conferenceConference presentation/ephemera

Abstract

Financial risk tolerances are frequently considered a complex, elastic and diverse psychological trait, providing a cognitive stereotype which at the individual layer, guides individual investment behaviours and decisions, and collectively, influences systemic risk acceptance, perception and regulatory policies (Grable 2008; Grable 2013). Defined as the “willingness to engage in behaviours in which the outcome remains uncertain with the possibility of an identifiable negative outcome”, financial risk tolerances are often influenced by many motivating factors including personal psychological biases, collective heuristics and contextual and environment cues which affect financial risk perceptions, assessments, attitudes and investment behaviours ((Irwin 1993 p.11; Daniel, Hirshleifer & Teoh 2002; Grable, Lytton & O'Neill 2004 p.142). There is however limited research on how these motivating factors influence individual and collective financial risk tolerance levels (Hirshleifer 2001; Grable, Lytton & O'Neill 2004). We therefore utilise Weick’s (1995) sensemaking process frameworks, to deepen understandings on the impact of investors financial risk biases and heuristics influencing risk tolerances within the financial ecosystem.
Original languageEnglish
Publication statusUnpublished - 2019
Event35th Annual Industrial Marketing and Purchasing (IMP) Conference and Doctoral Colloquium : Relationships, Interactions and Networks in Competitive Environments - IESEG School of Management, la Défense, Paris. , Paris, France
Duration: 27 Aug 201930 Aug 2019
https://www.impgroup.org/?t=IMP%20Conference%202019%20in%20Paris&newsid=296

Conference

Conference35th Annual Industrial Marketing and Purchasing (IMP) Conference and Doctoral Colloquium
Country/TerritoryFrance
CityParis
Period27/08/1930/08/19
Internet address

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