Enabling Consumers to Specify Risk Preferences Directly As an Example of Transformative Consumer Research

Daniel Goldstein, Columbia University / LBS
Eric Johnson, Columbia University
William Sharpe, Stanford University

Paper Title: Enabling Consumers To Specify Risk Preferences Directly as an Example Of Transformative Consumer Research

 

Author’s names: Daniel G. Goldstein, London Business School; Eric J. Johnson, Columbia University; William F. Sharpe, Stanford University

 

Investing for retirement is a domain of great consequence, often the most important financial decision people will ever make. However, a growing body of research shows that consumers have little understanding of the choices they are making. In the spirit of transformative consumer research, we have designed a novel method for assessing consumer investment risk preferences, one that which allows consumers to specify directly the outcomes they would like to obtain, rather than the investment products they would like to purchase. The method proves both reliable and valid in its ability to predict choice.
[ to cite ]:
Daniel Goldstein, Eric Johnson, and William Sharpe (2006) ,"Enabling Consumers to Specify Risk Preferences Directly As an Example of Transformative Consumer Research", in NA - Advances in Consumer Research Volume 33, eds. Connie Pechmann and Linda Price, Duluth, MN : Association for Consumer Research, Pages: 227-234.