The role of disappointment aversion and expectation proclivity in describing financial risk aversion among financial decision-makers

What is it about?

A common recommendation in the financial services and banking profession, for those who wish to avoid disappointment, is to reduce expectations associated with a choice outcome. We show that this advice may be over-simplified. While disappointment aversion was found to be positively associated with risk aversion, those who regularly established high expectations were the least likely to be disappointment averse.

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