User:Bradyjack/Risk inclination

Risk is a concept that denotes the precise probability of specific eventualities that may have both beneficial and adverse consequences. Risk assessment is measuring or assessing the likelihood that a risk action will occur and if it does occur, assessing both occurrences according to an agreed rule for the purpose of giving a single measure of potential impact. Malcolm J. Slakter proposed that risk taking, unlike guessing, involved the interaction of three components: (1) a penalty, (2) a prize, and (3) a stake. The stake represented something of value that a participant placed on an event that had an uncertain outcome with the hope of winning the prize that was considered valuable to the participant. The penalty was the loss of the stake due to an unfavorable outcome.

Researchers have found when a respondent was allowed indicate his or her level of confidence toward an answer selection on an objective test, a personality trait was activated. Frances Swineford referred to this trait as “a tendency to gamble”, and Robert C. Ziller referred to this trait as a “utility for risk”.

Risk Inclination, therefore, can be defined as having a mental disposition toward a predicted eventuality (i.e., a stake) that has consequences (i.e., a pemality or a prize). Measuring this type of mental disposition, which Swineford refers to as a personality trait that is separate from knowledge, differs from guessing because decisions made during times risk involve the possibility of negative consequences.