The Influence of Decision Contexts and Role Models on Female Risk Preferences

If you missed the last WAPPP Seminar, you wasted an opportunity to meet a former Jeopardy! contestant who is actually using Daily Doubles for more than just game show glory. Heidi Liu, Ph.D. Candidate in Public Policy at the Harvard Kennedy School and J.D. Candidate at the Harvard Law School, used a large dataset of Jeopardy! contestant betting patterns that allowed her to test whether female contestants exhibited different attitudes towards risk depending on the "gender context".

Heidi Liu, PhD and JD candidate at Harvard and former Jeopardy! contestant

How does this work? Heidi had a group of former contestants and another larger group of survey responders rate over 1,200 categories in the game show on the likelihood that men or women would correctly answer a question from that category. The categories where men were expected to perform better were coded as 'male categories' in the dataset, and in the same way, those where women were expected to do better were coded as 'female categories'. After noting that male and female contestants actually performed equally well on both types of categories, Lui presented her findings on the betting patterns of male and female contestants.

She found interesting differences between the genders. Men exhibit aggressive betting patterns across all categories. In contrast, women bet less aggressively overall. This result goes in accordance with robust evidence in the existing literature that categorizes risk-taking as an attribute of the masculine psychology. But the key contribution of Liu's research lies one level deeper. It turns out that women were found to be more risk averse when they were betting on 'male' categories, in which they are societally expected to underperform, than on the 'female' categories, where they were expected to do well. In other words, when dealing with a more masculine context, women tended to 'play it safe'.

Women are more likely to take risks when they're dealing with
more feminine contexts, regardless of ability

The Jeopardy! study is only one of the four studies that Liu presented to show how context can influence women's attitudes towards risk. She is building on previous research that identified increased risk-taking by men in physical tasks or financial decision making, but found no gender difference in risk attitudes in contexts such as prosocial heroism, as exhibited by some Holocaust survivors or even kidney donors, where women were just as likely to risk their lives or their health to save somebody else. Liu studied whether the gender content of certain contexts would be useful to predict women's attitudes towards risk. In one of the studies, she looked at women's decisions regarding a travel destination. When deciding on a destination for a professional conference, a male setting, women were much more likely to go with the safer option; in contrast when they were making a decision about a vacation destination, a more female stereotypical task, they tended to opt for the risky option. She reported similar findings for the other two studies. Women were more likely to choose risky options when making shopping decisions and less when making investment decisions, and the same happened with product choices.

Helping women become more comfortable with risk in male-dominated environments is important because they are contexts that greatly reward such behavior. Common attributes listed by venture capital firms, for example, as desirable in entrepreneurs often include words like 'aggressive', 'competitive', 'ambitious', 'relentless', 'with an appetite for risk', among many others that signal risk aversion as a negative. For this reason, Liu set up two additional studies that consider possible interventions to move women into risk-seeking territory. They focus on a critical aspect for any person's professional career: Role models.

Her first one exposed people to three different narratives of women who exhibited different degrees of counter-stereotypical behaviors and relatability. Only exposure to the story about a woman who was highly counter-stereotypical but also highly relatable had the effect of increasing risk-seeking among women. This means that the ideal role models may not necessarily be hyper-successful and unattainable, but rather, regular people who reach success on their own terms. The second study analyzes survey data from an Indian tech firm and finds that women who have a female supervisor are more likely to take risks at work. This goes in accordance with the results from the first study.

Heidi Lui is continuing her research on this topic as she works towards her PhD. Stay tuned to her work to continue learning about ways to get less women to play it safe and more women to just go for it.