Gender Jeopardy in Financial Risk Taking
Published 8/1/2008
Author: Xin He, J. Jeffrey Inman, and Vikas Mittal
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Executive Summary
The focus of this article is on financial risk taking, which is an emerging but important area in consumer research. From time to time, consumers must make crucial financial decisions that not only are risky in nature but also carry high stakes in life. In this article, the authors study the interactive effect of issue capability and gender on risk taking. Whereas previous research has shown that people with high issue capability tend to take more risks than those with low issue capability, the authors argue that gender moderates the effect of issue capability. The nature of the interaction depends on the compatibility between decision makers’ goal orientation and the task nature. Specifically, men are more sensitive to their level of issue capability in risk taking than women when the decision tasks are primarily influenced by gain achievement, such as investment decisions. The nature of these decisions (i.e., maximization of gains) is compatible with men’s agentic orientation that is mainly focused on the self. In contrast, women are more sensitive to issue capability than men in risk taking when the decisions are mainly motivated by loss avoidance, such as insurance decisions. The nature of these decisions (i.e., minimization of losses) is compatible with women’s communion orientation.
The authors test the joint effect of issue capability and gender in three studies. In Study 1, the authors show the moderating role of gender and issue capability in risk taking by analyzing contestants’ betting behavior on the Daily Double in the popular game show Jeopardy! In Study 2, the authors test the hypotheses in a laboratory experiment and examine the mediating role of the focus of attention. In Study 3, the authors investigate both investment and insurance decisions and show that the nature of the decision task influences the effects of issue capability and gender on risk taking. This article contributes to the literature on risk taking and on consumer financial decisions by showing the complex relationship among issue capability, gender, and the nature of the decision task. Furthermore, it has important managerial implications for financial advisers, policy makers, and consumer advocates.
Biography
Xin He is an assistant professor in the College of Business Administration at the University of Central Florida. He earned a PhD from the Katz Graduate School of Business at the University of Pittsburgh. He studies issues related to consumer and managerial decision making, particularly risk taking. His research appears in Journal of Consumer Research, Journal of Marketing Research, and Organizational Behavior and Human Decision Processes.
J. Jeffrey Inman joined the faculty of the Katz Graduate School of Business at the University of Pittsburgh in 2000. Before this, he was on the faculties at the University of Wisconsin (1994–2000) and the University of Southern California (1991–1994). His research focuses on consumption behavior and consumer decision making. He is on the editorial board of Journal of Consumer Research, Journal of Marketing Research, Journal of Marketing, Marketing Science, Journal of Consumer Psychology, International Journal of Marketing Research, and Journal of Retailing. He is an associate editor at Journal of Marketing Research and International Journal of Marketing Research and is also president of the Journal of Consumer Research Policy Board. Jeff received his BS in Mechanical Engineering from General Motors Institute (now Kettering University) in 1979, his MBA from Indiana University in 1982, and his PhD from the University of Texas in 1990. His work has appeared in Journal of Consumer Research, Journal of Marketing Research, Marketing Science, Journal of Marketing, Journal of Retailing, and California Management Review. Before venturing into academia, he was a production supervisor for General Motors and a semiconductor distribution manager for Texas Instruments.
Vikas Mittal is J. Hugh Liedtke Professor of Management–Marketing in the Jones Graduate School of Management at Rice University. He earned his PhD from Temple University and his bachelor’s degree in Business Administration from the University of Michigan. Currently, he serves on the editorial boards of several journals, including the Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, and Marketing Science.
Journal of Marketing Research, Volume 45, Number 4, August 2008
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