Gender Differences in Risk Attitudes in Hypothetical and Real Financial Decisions: An Experimental Investigation

This paper experimentally investigated whether a gender difference in risk attitudes existed for Korean students and whether a hypothetical bias, which may be defined as subjects’ tendency to be less risk averse in a hypothetical decision-making situation than in a real decision-making situation, existed. Moreover, we investigated if there was a gender difference in the hypothetical bias. In the course, we checked the validity of a self-reported risk measure in terms of the existence of the gender difference. While there have been many experimental studies both on gender difference in risk attitudes and on hypothetical bias in risk attitudes done in U.S. and Europe, it may not be certain that the results from the studies are directly applicable to Korean since a cultural difference may affect it. In this aspect, this experimental study for Korean could contribute to investigate the gender difference and hypothetical bias of Korean. This study found that women tended to be more risk averse than men in a real decision-making situation while there was no significant gender difference in a hypothetical situation. This study also found strong evidence that a hypothetical bias existed for both men and women, that there was no gender difference in the size of the hypothetical bias and that hypothetical self-reported risk attitudes were not able to predict the gender difference in the real decision-making situation.