Publications
Publications
- 2010
- California Management Review
Fretting About Modest Risks Is a Mistake
By: Matthew Rabin and Max Bazerman
Abstract
Managers often engage in risk-averse behavior, and economists, decision analysts, and managers treat risk aversion as a preference. In many cases, acting in a risk-averse manner is a mistake, but managers can correct this mistake with greater reflection. This article provides guidance on how individuals and organizations can move toward greater reflection and a more profitable aggregate portfolio of decisions. Inconsistency in risk preferences across decisions is a costly mistake for both individuals and for organizations.
Keywords
Citation
Rabin, Matthew, and Max Bazerman. "Fretting About Modest Risks Is a Mistake." California Management Review 61, no. 3 (May 2019): 34–48.