Existing research investigating human judgment and decision making describes patterns of systematic biases in the way people process information and make decisions. Framing effects, for example, demonstrate that logically equivalent alternatives presented in divergent linguistic frames can lead to systematically different choice outcomes; in general, people demonstrate a preference for risk-averse behaviour when information is framed positively and risk-seeking behaviour when information is framed negatively. Similarly, the status quo bias describes a tendency for decision makers to maintain current or previous decisions when confronted with the availability of new options, demonstrating that people possess a predisposition to continue with established behaviour. This research proposes that the goals a decision maker adopts and the hedonic tone of the stimulus being evaluated influence whether framing effects are observed; similarly, the past performance of the status quo and complexity of available options influence whether participants exhibit a preference for the status quo. Using a survey-based experimental methodology, the aforementioned propositions are investigated by systematically manipulating characteristics of decision problems in order to reveal the mechanisms which influence the emergence of framing effects and the status quo bias. The results demonstrate that when positive goals or stimuli are emphasized, usual framing effects are observed; that is, participants demonstrate a preference for risk-averse behaviour in the positive frame and risk-seeking behaviour in the negative frame. Conversely, when negative goals or stimuli are emphasized, participants fail to demonstrate the expected shift in risk-preference. Past performance and complexity of the available alternatives are also shown to influence preference for the status quo; specifically, participants demonstrate greater preference for the status quo when past performance is strong compared to when it is weak, and when the number of available options is low compared to when it is high. The findings of this research improve our understanding of how contextual factors influence shifts in preference and the emergence of decision making biases; moreover, the current research demonstrates the need for future research to consider the influence of situational and contextual factors when investigating decision making in particular and human behaviour in general.

Existing research investigating human judgment and decision making describes patterns of systematic biases in the way people process information and make decisions. Framing effects, for example, demonstrate that logically equivalent alternatives presented in divergent linguistic frames can lead to systematically different choice outcomes; in general, people demonstrate a preference for risk-averse behaviour when information is framed positively and risk-seeking behaviour when information is framed negatively. Similarly, the status quo bias describes a tendency for decision makers to maintain current or previous decisions when confronted with the availability of new options, demonstrating that people possess a predisposition to continue with established behaviour. This research proposes that the goals a decision maker adopts and the hedonic tone of the stimulus being evaluated influence whether framing effects are observed; similarly, the past performance of the status quo and complexity of available options influence whether participants exhibit a preference for the status quo. Using a survey-based experimental methodology, the aforementioned propositions are investigated by systematically manipulating characteristics of decision problems in order to reveal the mechanisms which influence the emergence of framing effects and the status quo bias. The results demonstrate that when positive goals or stimuli are emphasized, usual framing effects are observed; that is, participants demonstrate a preference for risk-averse behaviour in the positive frame and risk-seeking behaviour in the negative frame. Conversely, when negative goals or stimuli are emphasized, participants fail to demonstrate the expected shift in risk-preference. Past performance and complexity of the available alternatives are also shown to influence preference for the status quo; specifically, participants demonstrate greater preference for the status quo when past performance is strong compared to when it is weak, and when the number of available options is low compared to when it is high. The findings of this research improve our understanding of how contextual factors influence shifts in preference and the emergence of decision making biases; moreover, the current research demonstrates the need for future research to consider the influence of situational and contextual factors when investigating decision making in particular and human behaviour in general.

Beslut angående finansiella investeringar sker för den enskilde individen likaväl som i företag. Besluten följer den finansiella världens utveckling och blir därmed alltmer komplexa. Placeringar av monetära tillgångar med förväntan att generera inkomst eller värdestegring innebär en risk. Risknivån på investeringen beror på investeringsbeteendet hos beslutsfattaren som kan ge konsekvenser på den finansiella marknaden och kan så småningom leda till finanskriser om ett överdrivet behov av risk uppstår hos beslutsfattare. Genom att studera vad som påverkar risktolerans öppnas dörrar för att kunna förstå vad som ligger bakom vilken risk som väljs vid en finansiell investering. När förändring i risktolerans studeras tas hänsyn till vilka sorters beslutsfattare som finns på den finansiella marknaden. I uppsatsen studeras risktolerans hos beslutsfattare i form av enskilda individer och grupper med syftet att testa hur risktoleransen förändras om en individ tar ett beslut enskilt eller i samråd med andra. I syftet ingår också att studera om kompositionen av en grupp med hjälp av variation i gruppstorlek och könsfördelning kan påverka gruppens risktolerans. Tidigare forskning indikerar att grupper har högre risktolerans än individer dock finns studier med omvänd syn. Studien i uppsatsen har skett genom kvantitativa experiment där respondenter enskilt och i sammansatta grupper svarat på olika frågeformulär. Av studien finnes resultat att män är mer risktoleranta än kvinnor. Emellertid visades inget signifikant resultat att en högre andel män i en grupp ökar risktoleransen i gruppen. Vid en storleksjämförelse visades ingen signifikant påverkan i risktoleransen av gruppens storlek. Sammanfattningsvis påvisades i ett av studiens test att grupper har högre risktolerans än individer medan två andra inte resulterade i en signifikant skillnad mellan dem. Uppsatsens primära begränsningar är mängden grupper som deltog i experimentet som vid ett högre antal hade kunnat ge mer precisa resultat samt att utbildningsnivån bland respondenterna var konstant vilket enligt tidigare forskning kan ge en försvagning av könseffekten vid mätning av risktolerans. Tidigare forskning om risktolerans har mestadels skett om individer och forskning om grupper är begränsad. På grund av det ger vår studie ett bidrag i form av en återuppväckande syn på risktolerans med ett nytt perspektiv om gruppstorlek som förändringsfaktor samt förslag till vidare forskning inom risktolerans. / Individuals as well as corporations make financial decisions regarding investments. Financial decisions advances along with the development of the financial world and thereby continuously increase in their complexity. A monetary investment regarding expectations of generating income involves risk. The level of risk depends on the decision maker’s financial behavior which could cause impacts in the financial market and may eventually be a reason for financial crises to arise, in case the decision maker has an excessive need to take risk. Studying which factors that affect risk tolerance contributes to an understanding of why a certain risk level is chosen when making a financial investment. When studying risk tolerance it has to be taking into account who is the decision maker. This dissertation studies risk tolerance of individuals and groups as two different decision makers, with the purpose of testing how the risk tolerance shifts if the decision is made either alone or in consultation with others. The purpose also includes studies on different compositions of a group regarding to gender and the size of the group and how this might affect the risk tolerance within the group. Previous research indicates that groups have a higher risk tolerance in comparison to individuals, there are however studies with opposite findings. The quantitative study in this dissertation was done by two experiments where respondents were handed questionnaires to be answered first individually and then together after being divided into groups. The results showed that men have a higher risk tolerance than women. However, there was no significant result that a higher proportion of males in a group increase the risk tolerance. When comparing small and large groups no difference was found in the level of risk tolerance. In conclusion, one of the tests in the study showed that groups have a higher risk tolerance than individuals however two tests showed a non-significant result in the difference between them. The limitations of the dissertation are the low participation in the group experiment where a higher number of groups would have been able to provide more accurate results and that respondents had a constant level of education which may have caused a lower effect of gender. Previous research has mostly focused on individuals and according to this our dissertation provides a contribution through how group size can influence risk tolerance and we propose further research areas within groups and risk tolerance.

Sammanfattning Den finansiella marknaden har under de senaste decennierna till stor del präglats av både stark ekonomisk tillväxt och stora kriser, detta har lett till att risken relaterad till sparande och investeringar har blivit allt viktigare att kontrollera och undersöka. Samtidigt visar statistik från SCB att de svenska hushållen investerar allt mindre i aktier vilket kan skapa problem, både för den finansiella branschen i sig och det framtida välståndet. Dagens pensionssystem riskerar att inte klara framtidens ökande utbetalningsnivåer som krävs för att underhålla en allt större, äldre befolkning, som även lever allt längre. Detta är ett problem som gäller för hela EU och därför blir det allt viktigare med ett privat sparande, och därigenom att investera rätt. För att hjälpa privatpersoner att investera rätt, genom att utnyttja sin nivå av risktolerans, samtidigt som man gör det lättare för kreditgivare och rådgivare att kunna erbjuda korrekta produkter och investeringsstrategier, syftar denna studie huvudsakligen till att undersöka om det finns samband mellan olika demografiska och socioekonomiska variabler och nivåer av risktolerans. Med hjälp av tidigare studier valdes följande variabler att undersökas: kön, ålder, utbildningsnivå, relationsstatus, sysselsättning och inkomstnivå. Som verktyg för att mäta nivåer av risktolerans valdes Grable och Lyttons 13-items risk assessment instrument, vilken har genomgått ett flertal validitetsprövningar. Då majoriteten av forskningen inom finansiell risktolerans har genomförts på den amerikanska marknaden särskiljer sig denna studie då den riktar in sig på svenska individer, från 18 år till pension. Metoden för att få in svar har varit med hjälp av en enkätstudie, både via internet och genom pappersenkäter på ett antal arbetsplatser runt om i landet. Resultatet blev totalt 206 fullständiga enkäter och stark signifikans återfanns hos kön (99 procent konfidensintervall), där män i genomsnitt hade högre risktolerans än kvinnor. Även inkomstnivå var signifikant, med ett konfidensintervall på 90 procent, men visade att sambandet inte var perfekt positivt linjärt (låg inkomst = låg risktolerans, hög inkomst = hög risktolerans). Studien syftade även till att söka övriga förklaringar och samband som risktolerans också påverkar, med hänsyn till: sparande, pensionssparande, investeringsval, framtidsutsikt för den finansiella marknaden samt förändring av investeringsbeteende på grund av de senaste årens finansiella oro.Detta resulterade i att: 13,5 procent svarade att de inte hade något som helst privat sparande; mer än hälften av individerna uppgav att de inte har något privat pensionssparande; individer med högre inkomster valde oftare aktier som främsta investeringsval än de med lägre inkomster, som föredrog sparkonton; en övervägande majoritet har inte ändrat sitt investeringsbeteende men 25 procent av respondenterna angav att de investerar mindre nu till följd de senaste årens finansiella oro på marknaden samt att 40,6 procent angav att det är mer riskfyllt med värdepapper idag; mer än hälften av respondenterna angav att de känner en viss oro inför sin framtida pension.

The purpose of this study is to describe the financial risk tolerance of young swedish residents, which factors that affect their financial risk tolerance, and how their risk tolerance affects their investment behavior. Previous studies within the subject of financial risk tolerance have focused on a wider range of ages, and most of the studies have been made on an American population. This study also contributes with more factors in the same study than many previous studies. The factors included in this research are Gender, degree of education, relationship status, income, mood, birth order, future economic expectations, and financial knowledge. The research contains a quantitative study, where the data have been collected with a survey. The study has a deductive approach, which means that the study starts with theory and moves on with empiricism and hypotheses. The hypotheses have been developed from the results of earlier studies. The survey was dedicated to young Swedish residents in the ages of 18 to 30 years old. There were 123 respondents who answered the survey, which contained 24 questions. To measure the risk tolerance of young swedish residents, the Grable and Lytton’s Risk Tolerance Scale have been used. The result of the study tells us that the financial risk tolerance of young swedish residents are affected by the factors: Gender, future expectations on the stock market and financial knowledge. The study also tells us that there is a significant different in financial risk tolerance between young swedish residents who invest in stocks, compared to those who do not invest in stocks.

Doctor of Philosophy / Department of Personal Financial Planning / Sonya L. Britt / This dissertation explores the personal financial planning risk-assessment process. Specifically, the study has five main purposes: 1. Explore the associations among independent risk-assessment variables. 2. Explore the concept that prudent financial risk-assessment goes beyond estimating an individual’s risk tolerance. 3. Explore the impact that each risk variable has on an individual’s overall Comprehensive Risk Profile (CRP). 4. Construct a comprehensive method of risk-assessment to estimate an individual’s overall risk profile. 5. Develop a weighted risk profile score and assign it to a target asset allocation model. Risk-assessment is one of the most instrumental components of the financial planning process. Financial planners and advisors have a fiduciary, as well as a suitability, responsibility to assess the level of risk individuals should bear with respect to their financial plan (Morse, 1998). Because of this, the evaluation of one’s risk profile impacts the success of an individual’s financial plan. If the risk-assessment is accurate, financial goals will have a higher likelihood of being met. To date, little research in the personal financial planning field has attempted to model financial risk-taking behavior in a way that is useful for practitioners, academics, and policy makers. The literature has tended to focus on either models of risk-taking rooted in economic utility theory, or tests of hypotheses related to the association among demographic and socioeconomic factors and risk-taking (Grable & Lytton, 1998). Traditional economic models do not fully account for the role that personal, behavioral, and environmental factors play in influencing individuals’ behavior beyond maximizing their expected utility (Hanna & Chen, 1997). Researchers have yet to develop a risk-profiling system that uses these behavioral or personal factors, to describe an individual’s financial risk-taking framework. Ultimately, the results of this study will lead to a multidimensional, comprehensive, accurate method of risk-assessment for both academic researchers, as well as practitioners. The following will serve as the empirical model for the study.

O objetivo do presente trabalho é estabelecer a relação entre o nível de tolerância ao risco financeiro de investidores (e investidores potenciais), suas características demográficas, seus traços de personalidade, vieses comportamentais e nível de educação financeira. A literatura consultada subsidiou os conceitos dos traços de personalidade bem como os conceitos de finanças comportamentais, educação financeira e tolerância ao risco. A metodologia utilizada foi descritiva, com método quantitativo, tendo sido utilizadas as técnicas estatísticas de análise fatorial exploratória e regressão múltipla hierárquica para tratamento dos dados. Foi aplicada uma survey em amostra não probabilística, selecionada por conveniência, constituída por indivíduos maiores de 18 anos, oriundos de vários estados brasileiros. Os resultados mostraram que, na amostra estudada, os homens são mais tolerantes ao risco do que as mulheres, a faixa etária tem uma relação inversa com a variável independente, indicando que os mais jovens seriam mais propensos ao risco. Além disso, os achados indicam que os traços de personalidade não foram importantes para explicar a tolerância ao risco uma vez que, no modelo final da análise de regressão hierárquica, nenhuma das variáveis que compõem os traços de personalidade foram significantes. Quanto aos vieses comportamentais abordados neste trabalho, o viés do autocontrole, foi considerado significante para explicar a tolerância ao risco, indicando que as pessoas com mais autocontrole têm maior tolerância ao risco. A educação financeira também foi uma variável significante para explicar a tolerância ao risco, sendo positivamente relacionada com a mesma. Dessa forma, os resultados aqui obtidos indicaram que a tolerância ao risco é influenciada por características comportamentais e cognitivas. / The aim of the present study is to establish the relationship between the level of financial risk tolerance of investors (and potential investors), demographic characteristics, personality traits, behavioral biases and level of financial education. The literature consulted supported the concepts of personality traits as well as the concepts of behavioral finance, financial education and risk tolerance. The methodology adopted was descriptive and quantitative. The statistical techniques used was the factorial analysis and hierarchical multiple regression. The sample was non probabilistic, selected by convenience and consisted of individuals over 18 years of age, from several Brazilian states. The results showed that, in the sample studied, men are more risk tolerant than women, the age has an inverse relationship with the independent variable, indicating that the younger ones would be more risk-prone. Furthermore, the findings indicate that personality traits were not important in explaining risk tolerance since, in the final model of hierarchical regression analysis, none of the traits were significant. Regarding the behavioral biases addressed in this study, the self-control bias was considered significant in explaining risk tolerance, indicating that people with more self-control have greater risk tolerance. Financial education was also a significant variable to explain risk tolerance and was positively related to it. Thus, the results achieved indicate that risk tolerance is influenced by behavioral and cognitive characteristics.

Background: The traditional neoclassical model of finance has assumed that all individuals act rationally and that they update their beliefs according to the information they have obtained to maximise their utility. This concept has been challenged by behavioural finance which has over the past decades become a new approach to better understand certain behaviours. Behavioural finance is a broad area which can be divided into different areas. One of them is investor behaviour, which will be the focus of this thesis. Research has shown that investors do not act rationally when deciding how much risk to take when considering an investment. Instead, it has been found that there are other factors that influence risk-taking in an investment, for instance gender, income, marital status and age. Purpose: The purpose of this thesis is to better understand if a selected group of demographic factors can affect the risk attitude investors in Sweden have with regard to their investments and to determine how well these factors explain the level of risk. The chosen demographic factors are gender, age, marital status and income. Method: This study is conducted using a deductive approach and employing a quantitative research method. A multinomial logistic regression was performed in the statistical program R. The data used is secondary data collected from financial counselling meetings of 111,265 clients during the period of 2018-01-03 to 2019-04-04. It is gathered from one of Sweden’s largest bank who measures customers’ risk tolerance by using a risk assessment tool that categorises risk tolerance into five levels where one is the lowest and five is the highest. Conclusion: Statistically significant results confirm that that the selected demographic factors have an effect on the risk level an investor takes. Males have higher risk tolerance than women, the older an individual is, the less risk the person wants to take, married people have higher risk tolerance than those that are not, and risk tolerance increases slightly with income.

2008年由次貸引爆之全球金融風暴，除造成美國金融機構破產及併購，亦波及製造業，深究其原因，不外乎輕忽風險管理建立與執行之落實，未完整量化與管理企業所能承受之風險；尤其人壽保險業所銷售之保險契約，各國監理機關皆強化壽險業之監管，以風險資本為壽險業評估清償能力之指標。 風險胃納顯示企業對風險基本態度，包括企業承擔風險之意願，風險限額及控管模式，風險容忍度是揭露企業風險管理之量化和質化結果。本研究依風險基礎資本額制度（Risk-Based Capital，RBC）建立公司整體市場風險容忍度之設定，依據風險限額及預警指標建立控管程序，並檢視個案金融機構風險容忍度之擬定流程。 依個案公司風險限額及預警指標之建立流程，並評估該公司於2007-2008年全球金融風暴之實際財務影響，歸納結果如下；(1)除交易單位風險限額外，並應訂定交易商品及交易員風險限額導入前台交易系統；(2)應增計利率風險；(3)除市場風險限額外，應建置信用風險限額、作業風險限額模組，架構公司整體風險胃納及風險容忍度，並執行限額管理；(4) 發展即時監控系統，檢視公司風險承受度。 / In 2008, global financial crisis, inspired by subprime mortgage, not only caused bankruptcy and mergers and acquisitions of U.S. financial institutions but also spread to manufacturing. Taking a close look at the reasons, they are overlooking the establishment and implementation of risk management implementation and incompletely quantitating the risk that the management companies can bear. National supervisory authorities have strengthened supervision of the insurance industry and established risk capital as an indicator for the insurance industry to assess the solvency. Risk appetite shows the company’s basic attitude towards risk, including the willingness to take risks, risk limit, and control mode. Risk tolerance is to expose the results of the company’s risk management of quantitative and qualitative. This study is according to RBC (Risk-Based Capital) to set the company’s overall market risk tolerance and based on risk limit and early warning indicator to set control procedures. Besides, this study surveys the financial institution case whose preparation process of risk tolerance. According to the case’s established procedures of risk limit and early warning indicator, assessing its actual financial impact during global financial crisis from 2007 to 2008, this study summarizes as follows: (1) In addition to the risk limit of the trading unit, front-end trading system of trading goods and traders into risk limits should be established. (2)Increase the caculation of the interest rate risk. (3) Beside the market risk limit, credit risk limit and operational risk limit model should be established. Build the company’s overall risk appetite and risk tolerance, and implement the quota management. (4) Develop the real-time monitoring system and survey the company’s risk tolerance.

O objetivo do presente trabalho é estabelecer a relação entre o nível de tolerância ao risco financeiro de investidores (e investidores potenciais), suas características demográficas, seus traços de personalidade, vieses comportamentais e nível de educação financeira. A literatura consultada subsidiou os conceitos dos traços de personalidade bem como os conceitos de finanças comportamentais, educação financeira e tolerância ao risco. A metodologia utilizada foi descritiva, com método quantitativo, tendo sido utilizadas as técnicas estatísticas de análise fatorial exploratória e regressão múltipla hierárquica para tratamento dos dados. Foi aplicada uma survey em amostra não probabilística, selecionada por conveniência, constituída por indivíduos maiores de 18 anos, oriundos de vários estados brasileiros. Os resultados mostraram que, na amostra estudada, os homens são mais tolerantes ao risco do que as mulheres, a faixa etária tem uma relação inversa com a variável independente, indicando que os mais jovens seriam mais propensos ao risco. Além disso, os achados indicam que os traços de personalidade não foram importantes para explicar a tolerância ao risco uma vez que, no modelo final da análise de regressão hierárquica, nenhuma das variáveis que compõem os traços de personalidade foram significantes. Quanto aos vieses comportamentais abordados neste trabalho, o viés do autocontrole, foi considerado significante para explicar a tolerância ao risco, indicando que as pessoas com mais autocontrole têm maior tolerância ao risco. A educação financeira também foi uma variável significante para explicar a tolerância ao risco, sendo positivamente relacionada com a mesma. Dessa forma, os resultados aqui obtidos indicaram que a tolerância ao risco é influenciada por características comportamentais e cognitivas. / The aim of the present study is to establish the relationship between the level of financial risk tolerance of investors (and potential investors), demographic characteristics, personality traits, behavioral biases and level of financial education. The literature consulted supported the concepts of personality traits as well as the concepts of behavioral finance, financial education and risk tolerance. The methodology adopted was descriptive and quantitative. The statistical techniques used was the factorial analysis and hierarchical multiple regression. The sample was non probabilistic, selected by convenience and consisted of individuals over 18 years of age, from several Brazilian states. The results showed that, in the sample studied, men are more risk tolerant than women, the age has an inverse relationship with the independent variable, indicating that the younger ones would be more risk-prone. Furthermore, the findings indicate that personality traits were not important in explaining risk tolerance since, in the final model of hierarchical regression analysis, none of the traits were significant. Regarding the behavioral biases addressed in this study, the self-control bias was considered significant in explaining risk tolerance, indicating that people with more self-control have greater risk tolerance. Financial education was also a significant variable to explain risk tolerance and was positively related to it. Thus, the results achieved indicate that risk tolerance is influenced by behavioral and cognitive characteristics.