“Investment Risk Behavior in Different Domains: Entrepreneurs vs. Public Employees”

The definition and measurement of risk propensity has long been a topic of debate among researchers, reflecting the perceived theoretical and practical importance of the construct. Recent work by Weber and collaborators suggests that such apparent domain differences in risk taking might have more to do with situational, domain-related differences in the perception of risk than with attitudes toward risk (Weber and Milliman, 1997; Weber, 2001). The bunjeejumpers may well dislike risk in both his recreational and social decisions (i.e., be consistently risk-averse across both domains) but perceive the risk of fall from a bridge to be very low (perhaps because it feels controllable) and the risk in social situations to be high. This study analyzes differences in risk behavior and risk propensity between different domains like entrepreneurs and people employed in public administration. We used a translated and validated version of the original Domain-Specific Risk-Taking (DOSPERT) scale developed by Weber, Blais, and Betz in Italian language. This scale is for use in measuring, for several risky activities/behaviors, an individual’s behavioral likelihood, risk perception, and perception of expected benefit. The scale contains 40 items, evenly distributed across five general domains: financial decisions, health/safety, recreational, ethical, and social decisions. We investigated if entrepreneurs are more risk-taking in financial domain than people employed in public administration.