Thomas, Philip J

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                          Thomas, P. J. (2019). Why the most risk averse people sometimes take theriskiest decisions: A perspective from psychology. Paper presented at SWNuclear Hub Symposium Fukushima Secondary Health Effects, Bristol,United Kingdom.Peer reviewed versionLink to publication record in Explore Bristol ResearchPDF-documentUniversity of Bristol - Explore Bristol ResearchGeneral rightsThis document is made available in accordance with publisher policies. Please cite only the publishedversion using the reference above. Full terms of use are available:http://www.bristol.ac.uk/pure/about/ebr-termsFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20191Why the most risk averse people sometimes take the riskiest decisions. A perspective from psychologyPhilip ThomasProfessor of Risk ManagementSafety Systems Research CentreSouth West Nuclear Hubphilip.thomas@bristol.ac.ukJ-value website:http://www.jvalue.co.uk/NREFS Special Issue on Coping wth a Big Nuclear Accident:https://www.sciencedirect.com/journal/process-safety-and-environmental-protection/vol/112/part/PAFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20192Context: a tale of two headlines on the same day (both reporting on the NREFS results)Nuclear disaster fallout ‘would be no worse than living in London’Oliver Moody, Science CorrespondentNovember 23 2017, 12:01am, The TimesLiving in London 'poses same risk to health as living in nuclear fallout zone' Alexandra Richards, 23 November 2017 08:42, Evening Standard• The Prime Minister of Japan was seriously considering evacuating Tokyo.• In the end the Government asked 111,000 people to move out and a further 49,000 self-evacuated.  85,000 had not returned 5 years later.• But no-one advocated that London be evacuated.Risk aversionFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20193Mathematical/economic definition of risk-aversion in terms of utility of wealth00.511.522.530 10,00020,00030,00040,00050,00060,00070,00080,00090,000100,000Wealth, x  (£)Utility, u(x)( )( )Let  be the marginal utility of wealth:.  The elasticity, ,  of the marginal utility ofwealth is the normalised derivative:=Risk-aversion, , is the negative of :=Thismdumdxx dmm dxu xx dmxm dx u xηηε ηε=′′− = −′ is dimensionless, making it possible.to generalise to quantities other than moneyThe mathematical definition of risk-aversion, ɛ, is found to correspond well with its every-day interpretation1u x ε−=Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20194The psychological perspectiveFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20195The hoop the peg experiments of John W. Atkinson, US psychologist (1923 – 2003)Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20196The experiment• Let a group of people play hoop the peg and observe the distance they throw from.• Measure, in an independent test, their motivation to achieve.• Compare the two measurements.• Draw conclusions.Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20197• Atkinson's insight was that there were two competing pressures: (i) motivation to achieve and (ii) motivation to avoid failure.  Net motivation was then simpy the first minus the second.• He produced a simple mathematical model that came close to explaining the observed modes of behaviour.• A utility-disutility model following Atkinson's insight, with risk-aversion, ɛ, as parameter can provide a good explanation of the distinctive modes observed.Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201985 year olds playing the game: modes of behaviourAtkinson, J. W., 1957, "Motivational determinants of risk-taking behaviour", Psychological Review, Vol. 64, No. 6, 359 – 372.Thomas, P. J., 2013, "The importance of risk-aversion as a measurable psychological parameter governing risk-taking behaviour", Journal of Physics:Conference Series 459 http://iopscience.iop.org/1742-6596/459/1/0120520.02.04.06.08.00 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1Degree of difficulty, p fMotivational density, h(εε εε,pf)Risk-averseMore risk-averse Less motivated individuals; stricty risk-averse individuals00.511.522.533.50 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1Degree of difficulty, p fMotivational density, h(εε εε,pf)Risk-confident More risk-confidentHighly motivated individuals; risk-confident individualsFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 20199Atkinson's further study on university students• The 1957 study had pinpointed the underlying modes, but good quantitative data was lacking.• So in 1960 Atkinson followed it up with a further study on 45 male university students:• Atkinson, J. W. and Litwin, G. H., 1960, "Achievement motive and test anxiety conceived as motive to approach success and motive to avoid failure", Journal of Abnormal and Social Psychology, Vol. 60,No. 1, 1960, 52 – 63. Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201910Independent tests allowed the cohort of 45 to be split into 4 groups:   1. Group 1, high desire to achieve and low level of test anxiety: "H – L"   (13 subjects) 2. Group 2, high desire to achieve and high level of test anxiety: "H – H"   (10 subjects) 3. Group 3, low desire to achieve and low level of test anxiety: "L – L"  (9 subjects) 4. Group 4, low desire to achieve and high level of test anxiety: "L – H"  (13 subjects)  A set of lines at discrete distances from the target were marked on the ground: at 1 foot, 2 feet, 3 feet, ..., and 15 feet (1 ft = 0.3048 m), and the students were given the instructions:  "Today you are going to play a ring toss game. You will have an opportunity to take 10 shots at the target from any line you wish. You may move after each shot or shoot from the same line. Someone will record your shots and get your code number when you finish. We want to see how good you are at this." Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201911Atkinson's and Litwin's recorded shots (after deconvolution to remove the filtering they imposed)0102030400 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Distance from target (ft)Percentage of shotsH - LH - HL - LL - H1. H – L2. H – H3. L – L4. L - HFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201912Matching of shots after re-filtering to match Atkinson and Litwin filtered results051015202530350 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Distance (feet)Filtered numbers of shots: Atkinson & Litwin and recursive rolling averaging (RRA)H - L Atkinson & LitwinH - L RRAH - H Atkinson & LitwinH - H RRAL - L Atkinson & LitwinL - L RRAL - H Atkinson & LitwinL - H RRAFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201913Points to note• None of the groups conformed solely to either 1. a risk-confident mode, or2. a strictly risk-averse mode.• But the most achievement-minded (H – L) group took many more of its throws from mid-range positions than any other group.• The group, L – H, spread its pitching positions over a much more evenly spread set of positions.• The other two groups (H – H and L – L ) exhibited behaviour somewhere between these extremes.Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201914Modelling the observed behaviourThe behaviour of the groups may be modelled by a new probability density that is the expected value of a new, random probability density, ( )1 2,mG p ε ε   with an expected or average value:  ( )( ) ( ) ( ) ( )1 2 1 2, 1m m mE G p h p h pα αε ε ε ε−= +   Risk-aversion is now regarded as a random variable that may take one of two values: negative risk-aversion for risk-confidence  1 1.02ε = −  postive risk-aversion for true risk aversion 52 1.0 10ε−= + ×    αα− is the propensity to display risk confident behaviour is the propensity to display (strictly) risk averse behaviour is the degree of difficulty of the task chosen (= prob. of failure)1mpFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201915Matching the average probability density, conditional on propensity for risk confidence/ risk-aversion: all groups00.050.10.150.20.250 0.10.20.30.40.50.60.70.80.91Degree of difficulty, p mProbability of selecting degree of difficultyAll groups, fromestimated raw shotsBest fit risk-aversionmodelFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201916H – L Group00.050.10.150.20.250.30.350.40 0.10.20.30.40.50.60.70.80.91Degree of difficulty, p mProbability of selecting degree of difficulty1: H - L from estimatedraw shotsBest fit risk-aversionmodelFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201917H – H Group00.050.10.150.20.250 0.10.20.30.40.50.60.70.80.91Degree of difficulty, p mProbability of selecting degree of difficultiy2. H - H from estimatedraw shotsBest fit risk-aversionmodelFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201918L – L Group00.050.10.150.20 0.10.20.30.40.50.60.70.80.91Degree of difficulty, pmProbability of selecting degree of difficulty3. L - L from estimatedraw shotsBest fit risk-aversionmodelFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201919L – H Group00.050.10.150 0.10.20.30.40.50.60.70.80.91Degree of difficulty, pmProbability of choosing degree of difficulty4. L - H from estimatedraw shotsBest-fit risk-aversionmodelFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201920Fraction of the time risk-confidence is displayed within the groups (minimising sum of squared errors)0.00.20.40.60.81.0All 1.  H-L 2.  H-H 3. L-L 4.  L-HGroupProbability, αα αα, of risk-aversion, εε εε1Probability of exhibiting the risk-confident mode, ɛ1εFukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201921Conclusions• The risk-aversion parameter, ɛ, and the propensity to risk-aversion,        (1 – α), allow the behaviour of the 45 students to be modelled well, both overall and at the group level.• The exercise suggests that an individual does not have a single value of risk-aversion, but will experiment to find the value that suits him/her and the situation best.• The two basic descriptions and the four resultant classifications, H – L, H – H, L – L and L – H map well onto the propensity to adopt a risk-averse strategy.• There is a variation in propensity to risk-aversion from group to group. • That variation conforms with intuitive understanding: • those exbiting both a high motivation to achieve and a low test anxietydisplay the lowest propensity to adopt a risk-averse strategy (most risk confident)• those exhibiting a low motivation to achieve and a high test anxiety display the highest propensity to adopt a risk-averse strategy (most risk-averse)Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201922Conclusions (continued)• We may characterise those with the highest propensity to adopt a risk-averse strategy as "most risk-averse" and those with the lowest propensity to embrace such a strategy.• By this definition, the most risk-averse people are the most likely to adopt a strategy with the highest chance of failure.• Conversely, the most risk-confident are the least likely to take on such a strategy.Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201923Wider implications• Certain caveats need to be uttered: • the results come from a study of 45 male university students playing a game with not money at stake and no obvious carry-over into long-term career prospects.  • The low stakes will have an effect on the range of risk-aversions, ɛ1,ɛ2, considered by the decision maker.• The range of propensities to be strictly risk-averse, 1 - α, are likely to reflect the groups of students studied in this exercise rather than be general.• Nevertheless the ideas generated are intuitively appealing and their essence may transfer into real-world situations.Fukushima Secondary Health Effects Symposium, University of Bristol 10 Dec 201924Fuller results• Thomas, P., "Why the most risk averse take the biggest risks: a quantitative re-analysis of Atkinson's and Litwin's 'hoop-the-peg' experiments.  Part 1: Simulation and model validation, Part 2: Establishing the raw data" Submitted to Nanotechnology Perceptions

Why the most risk averse people sometimes take the riskiest decisions:A perspective from psychology

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Why the most risk averse people sometimes take the riskiest decisions:A perspective from psychology

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