Attitudes toward risk and uncertainty: The role of subjective knowledge and affect

Abstract An individual's attitude toward risk is often measured by their behavioral tendency in risky situations. However, commonly used self‐report measures of risk attitudes often do not explicitly specify “risk” in all the items, which results in an unsystematic mix of both perceived uncertainty and risk (as loss). Thus, an individual's endorsement of those items can vary as a function of not only the latent construct of attitudes toward risk, but also factors including prior knowledge and affective reaction to uncertainty. Two studies were carried out to examine the extent to which participants perceive behavioral tendency items as entailing uncertainty or risk (as loss) and how behavioral tendency can be influenced by prior knowledge. Results indicate that endorsement of behavioral tendency was significantly greater when “risk” information was implicit when compared with items that had explicit information to contextualize the uncertainty or risk. Furthermore, prior knowledge had a significantly stronger influence on the endorsement of items in which risk information was implicit than on the explicit uncertainty/risk items. Finally, uncertainty and risk in the items appeared to influence behavioral tendency significantly via emotional responses to the items. This research highlights the need for researchers to more adequately control for different sources of variability when measuring the desired construct of attitude toward risk.