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1. Measuring Risk Attitudes for Strategic Decision-Making in a Collaborative Engineering Design Process

   Avşar, Alkim Z.; Stern, Jordan L.; Grogan, Paul T. (August 2022, ASME 2022 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference)

   This paper evaluates a questionnaire-based risk attitude assessment method to quantify individual risk attitudes for strategic, multi-actor design decisions. A lottery-equivalence questionnaire elicits a utility curve for risky payoffs which is fit to a Constant Absolute Risk Aversion (CARA) model. Secondary data from a multi-actor design experiment provides observations of strategic decisions in two-actor design games for validation. 124 participants complete the risk attitude questionnaire and a series of 29 experimental tasks. Assuming participants follow the risk dominance equilibrium selection criterion, a risk-neutral utility function accurately predicts 62.2% of decisions. Incorporating risk attitudes elicited from the questionnaire only increases the accuracy to 63.3% while incorporating risk attitudes inferred from observations increases the accuracy to 77.5%. While participants exhibit differential risk attitudes in design tasks, results show the lottery-equivalent questionnaire does not provide risk attitudes consistent with strategic design decisions. Results support findings that risk in the engineering domain is contextual. This paper concludes that risk attitude is an important factor in understanding strategic decisions in interactive engineering design settings and understanding risk attitudes can help create more efficient design processes. 

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2. The Association between Risk Perception and the Risk-Taking Behaviors of Construction Workers

   https://doi.org/10.1061/9780784481288.042  

   Dao, Bac; Hasanzadeh, Sogand; Esmaeili, Behzad (March 2018, Construction Research Congress 2018)

   The majority of human-factor models in construction safety assume that risk-taking behaviors, failure to perceive hazards, or misinterpreting the associated risks of hazards are the main contributing factors in accident occurrences. However, the findings for the link between risk-taking behaviors and risk perception are inconsistent. To address this knowledge gap, the current study focuses on measuring the association between risk perception and the risk-taking behaviors of construction workers. To achieve this objective, 27 undergraduate students from the University of Nebraska–Lincoln with at least 1 year of experience in the construction industry were recruited to participate in an experiment. To measure risk perception, the subjects were asked to assess the risk—in terms of likelihood and severity—associated with various scenario statements related to fall hazards. Subsequently, subjects performed the balloon analogue risk task (BART), a computerized decision-making simulation, to test the subjects’ risk-taking behaviors. The results of a correlational analysis showed that there is a significant negative association between an individual’s risk perception of fall hazards and his/her risk-taking behaviors. Additionally, differences in the risk-taking behaviors of subjects evaluated against their risk-perception scores were examined using a permutation simulation analysis. The results showed that there is a moderately significant difference in the risk-taking behaviors of subjects with low and high fall-risk perception. The research findings provide empirical evidence that people with lower risk perception tend to engage in more risk-taking behaviors. Furthermore, this study is one of the first attempts at using BART in the assessment of risk taking in construction safety and paves the way for a better understanding the human factors that contribute to construction accidents. 

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3. Sex moderates the effects of total sleep deprivation and sleep restriction on risk preference

   https://doi.org/10.1093/sleep/zsac120  

   Lim, Jeryl Y. L.; Boardman, Johanna; Dyche, Jeff; Anderson, Clare; Dickinson, David L.; Drummond, Sean P. A. (June 2022, Sleep)

   Abstract Sleep loss has been shown to alter risk preference during decision-making. However, research in this area has largely focussed on the effects of total sleep deprivation (TSD), while evidence on the effects of sleep restriction (SR) or the potentially moderating role of sex on risk preference remains scarce and unclear. The present study investigated risky decision-making in 47 healthy young adults who were assigned to either of two counterbalanced protocols: well-rested (WR) and TSD, or WR and SR. Participants were assessed on the Lottery Choice Task (LCT), which requires a series of choices between two risky gambles with varying risk levels. Analyses on the pooled dataset indicated across all sleep conditions, participants were generally more risk-seeking when trying to minimise financial loss (LOSSES) than while trying to maximise financial gain (GAINS). On GAINS trials, female participants were more risk-averse during TSD and SR, whereas male participants remained unchanged. On LOSSES trials, female participants remained unchanged during TSD and SR, whereas male participants became more risk-seeking during TSD. Our findings suggest the relationship between sleep loss and risk preference is moderated by sex, whereby changes in risk preference after TSD or SR differ in men and women depending on whether the decision is framed in terms of gains or losses. 

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4. When Choices Are Mistakes

   https://doi.org/10.1257/aer.20201550  

   Nielsen, Kirby; Rehbeck, John (July 2022, American Economic Review)

   Using a laboratory experiment, we identify whether decision-makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their axiom preferences. In instances of conflict, we give subjects the opportunity to re-evaluate their decisions. We find that many individuals want to follow canonical axioms and revise their choices to be consistent with the axioms. In a shorter online experiment, we show correlations of mistakes with response times and measures of cognition. (JEL C91, D12, D44, D91) 

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5. The Neural Basis of Risk Attitude in Decision-Making Under Risk: fNIRS investigation of the Simulated Electrical Construction Task

   Pooladvand, Shiva; Ay, Deha; Hasanzadeh, Sogand (January 2022, Proceedings of the ISARC)

   Risk propensity, or individuals’ attitude toward risk, can highly impact individuals’ decision-making in high-risk environments since those who merely focus on positive consequences associated with high-risk acts are more likely to engage in risk-taking behaviors. Previous studies identified activation in the prefrontal cortex during decision-making under risk to be a sign of an individual’s attitude toward risks. To investigate whether such past work—prevalent in behavioral research domains—translates into construction safety, this study conducted an experiment in a mixed-reality environment using functional near-infrared spectroscopy (fNIRS) technology to examine whether positive risk attitudes cause individuals to adopt risky construction behaviors and whether the activation of the prefrontal cortex of the brain can represent such risk attitudes. The results show that participants with a higher risk propensity had a higher brain activation during the risky electrical tasks; these individuals merely focused on gains, which motivated them to increase their risk-taking behavior and consequently experience more electrical accidents. Understanding workers’ attitudes toward risk will thus influence future understandings of decision behavior under risk. 

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