Risk perception, risk attitude and intelligence

The purpose of this study is to find out whether there is a connection between a person’s cognitive abilities and her attitudes toward risk. By means of an experiment we assess that risk neutral subjects seem to be more rational, and more intelligent, than risk averse and seeking individuals. Furthermore, subjects showing an inverse S-shaped probability weighting function are less intelligent than subjects showing an objective perception of probabilities. We also investigated the relationships between intelligence or risk attitudes and other variables: gender, age, education level and field. The correlation between the subject’s residence country and both intelligence and risk aversion is analysed: respondents currently living in Italy seem to be more intelligent than subjects living in the Netherlands. The sample of subjects living in the Netherlands and the one of individuals living in Italy show the same risk attitude distribution.