Theory and Decision

, Volume 60, Issue 2–3, pp 283–313 | Cite as

Gender, Financial Risk, and Probability Weights

  • Helga Fehr-DudaEmail author
  • Manuele de Gennaro
  • Renate Schubert


Women are commonly stereotyped as more risk averse than men in financial decision making. In this paper we examine whether this stereotype reflects gender differences in actual risk-taking behavior by means of a laboratory experiment with monetary incentives. Gender differences in risk taking may be due to differences in valuations of outcomes or in probability weights. The results of our experiment indicate that value functions do not differ significantly between men and women. Men and women differ in their probability weighting schemes, however. In general, women tend to be less sensitive to probability changes. They also tend to underestimate large probabilities of gains more strongly than do men. This effect is particularly pronounced when the decisions are framed in investment terms. As a result, women appear to be more risk averse than men in specific circumstances.


gender differences risk aversion financial decision making prospect theory probability weighting function 


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Copyright information

© Springer 2006

Authors and Affiliations

  • Helga Fehr-Duda
    • 1
    Email author
  • Manuele de Gennaro
    • 1
  • Renate Schubert
    • 1
  1. 1.Institute of Economic ResearchSwiss Federal Institute of TechnologyZurichSwitzerland

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