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Past research has resulted in contradictory findings concerning the effect of risk on decision-making behavior in organizations. This article proposes a model that reconciles these unresolved contradictions by examining the usefulness of placing risk propensity and risk perception in a more central role than has been previously recognized. Based on this analysis, it is posited that risk propensity dominates both the actual and perceived characteristics of the situation as a determinant of risk behavior. Propositions derived from the conceptual model provide an agenda for future research on individual risk behavior in organizational settings.
Sitkin et al. (1992) studied this question.