There are situations when a person interacts with another person to arrive at a decision. For instance, a private investor meets in a bank with a financial advisor because he or she wants to invest money. Or a patient in a hospital has to choose whether to undergo surgery or chemical therapy, or do nothing, and discusses the situation with a doctor. We call these situations dyadic decision situations. We focus on situations where there is some legal responsibility and a special relation between the client, who formally has to make and sign the decision, and the advisor, who is to help the client make a decision by making a recommendation on which option to choose.1

The aim of the research presented in this paper is to investigate the perceived investment risk of lay investors. Two surveys were conducted to examine the financial risk perception of German individual investors (N= 119 in study 1; N= 171 in study 2). Participants were asked to rate the risk and several aspects of different types of investment products (e.g. shares and bank savings books).Study 1 analyzed the specificity of risk perception of various common investment products. Separate regression analyses showed only minor differences in the composition of the risk perception models between the types of investment. A factor analysis revealed two dimensions of perceived investment risk, where one factor consists of aspects of loss and variability (factor risk), while the other comprises aspects of transparency and liquidity (factor manageability). The dimensions were used to classify the types of investment with regard to perceived risk.Study 2 focused on effects of individual characteristics on financial risk perception. Only financial literacy (measured by means of a knowledge test) proved to be relevant in a regression analysis where perceived investment risk was explained by using gender, age, investment experience, and financial literacy as predictors.Implications for an appropriate investment risk communication in financial consultancy were derived from the results. (C) 2011 Elsevier B.V. All rights reserved.

Are children under 5 years of age at greater risk of developing leukemia if they live close to a nuclear power plant? And if so, how much higher is the risk? The study by Kaatsch et al. (1) provides careful and differentiated answers to this question. Nevertheless, some readers will draw their own–varying–conclusions with regard to the risk. This although the investigation was painstakingly planned, conducted, and analyzed by an experienced and competent team, and although the data are reported lucidly and discussed critically. How can people form different opinions about the risk? How can they even argue about it? One reason lies in the term "risk," which denotes the possibility of harm. This term is very variably defined. In automobile insurance the risk is determined by the likelihood and extent of damage, on the stock market the risk for shares is price fluctuation, and in environmental policy the loss of a species counts as a risk. In medicine the risk is expressed as the probability of disease–inasmuch as corresponding data are available. Increasingly, for instance on pharmaceutical package inserts, one finds information such as "In isolated cases … has been observed" (2). However, many people have problems with probability. They understand it incorrectly, they overestimate low probabilities, they underestimate high probabilities (3). They fail to differentiate between low probabilities, e.g., between 10–2 and 10–5–their perception of risk is determined purely by the possibility that something may happen (4). Moreover, an important part is played by the way in which information is presented (5). Saying that the risk of leukemia is twice as high in the 5-km zone is much more dramatic than saying that there are 0.08 more cases of leukemia per year and site than would be statistically expected. The two statements are both justified by the study data and are thus equivalent, but are likely to have a very different impact. Even when quantitative data on probability and degrees of harm are available–and particularly when data are sparse or absent (e.g., mobile phones or genetic engineering)–other factors determine the perception and assessment of risks (6, 7, 8). Mountaineers assess the risk of an accident lower than shown by the accident statistics–because they voluntarily expose themselves to the risk. Although statistics prove the opposite, flying is perceived as riskier than traveling by automobile–because plane crashes are viewed as disasters and are reported dramatically in the media. With nuclear energy, relevant factors are that radiation cannot be perceived with the senses, that the consequences of an accident are seen as appalling, and that an accident could harm future generations. These aspects likely affect the debate on the study reported here. The two core statements are: (1) The incidence of leukemia in children under 5 years old is statistically significantly higher within 5 km of a nuclear power plant. (2) The additional radiation exposure in this zone is 1000 times lower than the natural background radiation, so that a causal connection is implausible. Different people will assess the risk differently. Statements about risk–from lay persons or experts–always reflect individual and societal perceptions and evaluations. No interpretation is necessarily wrong. Every interpretation can legitimately be included in a discussion or decision process, but the criteria must be clearly stated (9). The fierce controversy over the study shows what emotional and political turmoil can result from different perceptions of the same findings. The study points to problems in the estimation, assessment, and communication of risks–problems encountered ever more frequently by lay people, scientists, journalists, and politicians. It is the curse of knowledge: the more exhaustively and precisely we experiment, diagnose, measure, and analyze, the more difficult it becomes to interpret and integrate the knowledge gained.

Are children under 5 years of age at greater risk of developing leukemia if they live close to a nuclear power plant? And if so, how much higher is the risk? The study by Kaatsch et al. (1) provides careful and differentiated answers to this question. Nevertheless, some readers will draw their own–varying–conclusions with regard to the risk. This although the investigation was painstakingly planned, conducted, and analyzed by an experienced and competent team, and although the data are reported lucidly and discussed critically. How can people form different opinions about the risk? How can they even argue about it? One reason lies in the term risk, which denotes the possibility of harm. This term is very variably defined. automobile insurance the risk is determined by the likelihood and extent of damage, on the stock market the risk for shares is price fluctuation, and in environmental policy the loss of a species counts as a risk. medicine the risk is expressed as the probability of disease–inasmuch as corresponding data are available. Increasingly, for instance on pharmaceutical package inserts, one finds information such as In isolated cases … has been observed (2). However, many people have problems with probability. They understand it incorrectly, they overestimate low probabilities, they underestimate high probabilities (3). They fail to differentiate between low probabilities, e.g., between 10–2 and 10–5–their perception of risk is determined purely by the possibility that something may happen (4). Moreover, an important part is played by the way in which information is presented (5). Saying that the risk of leukemia is twice as high in the 5-km zone is much more dramatic than saying that there are 0.08 more cases of leukemia per year and site than would be statistically expected. The two statements are both justified by the study data and are thus equivalent, but are likely to have a very different impact. Even when quantitative data on probability and degrees of harm are available–and particularly when data are sparse or absent (e.g., mobile phones or genetic engineering)–other factors determine the perception and assessment of risks (6, 7, 8). Mountaineers assess the risk of an accident lower than shown by the accident statistics–because they voluntarily expose themselves to the risk. Although statistics prove the opposite, flying is perceived as riskier than traveling by automobile–because plane crashes are viewed as disasters and are reported dramatically in the media. With nuclear energy, relevant factors are that radiation cannot be perceived with the senses, that the consequences of an accident are seen as appalling, and that an accident could harm future generations. These aspects likely affect the debate on the study reported here. The two core statements are: (1) The incidence of leukemia in children under 5 years old is statistically significantly higher within 5 km of a nuclear power plant. (2) The additional radiation exposure in this zone is 1000 times lower than the natural background radiation, so that a causal connection is implausible. Different people will assess the risk differently. Statements about risk–from lay persons or experts–always reflect individual and societal perceptions and evaluations. No interpretation is necessarily wrong. Every interpretation can legitimately be included in a discussion or decision process, but the criteria must be clearly stated (9). The fierce controversy over the study shows what emotional and political turmoil can result from different perceptions of the same findings. The study points to problems in the estimation, assessment, and communication of risks–problems encountered ever more frequently by lay people, scientists, journalists, and politicians. It is the curse of knowledge: the more exhaustively and precisely we experiment, diagnose, measure, and analyze, the more difficult it becomes to interpret and integrate the knowledge gained.

The most flamboyant economic effect of the euro changeover on consumers was a dramatic increase in perceived inflation. To directly measure perceived inflation, Brachinger developed a new index of perceived inflation (IPI). This index is based on some hypotheses about factors influencing perceived inflation. An experimental study is presented which investigated the influence of two of these hypothesized factors, purchase frequency and loss aversion, on individual judgments of price changes. Furthermore, two additional factors have been included that are informative with respect to the IPI, product segment and price level. Judgments of inflation were assessed with three methods, yielding different results. Empirical evidence for the hypotheses was obtained.

In der Diskussion um den vorsorgenden Gesundheitsschutz bei Mobilfunktelefonen ist die spezifische Absorptionsrate (SAR-Wert) ein wichtiges Thema. In einer experimentellen Studie wurde untersucht, welche Wirkung die Information über verschiedene SAR-Werte (unterhalb des geltenden Teilkörpergrenzwerts von 2 W/kg) auf die Bewertung der Sicherheit von Mobilfunktelefonen durch potenzielle Handynutzer hat. Es zeigt sich, dass 94% der Probanden den SAR-Wert ihres eigenen Handys nicht kennen. SAR-Werte unterhalb des Grenzwertes werden nicht als gleichermaßen sicher eingeschätzt, sondern es wird umso mehr Sicherheit gesehen, je kleiner der SAR-Wert ist. Eine vollständige Sicherheit gibt es aber aus Sicht der Untersuchungsteilnehmer nicht, selbst wenn der Grenzwert deutlich unterschritten wird. Der explizite Hinweis (durch das Bundesamt für Strahlenschutz oder durch Verbraucherschutzverbände) auf einen Vorsorgewert ändert die Sicherheitsbewertung nicht. Erwartungsgemäß spielen Unterschiede in der Risikowahrnehmung für die Beurteilung der Sicherheit der SAR-Werte eine Rolle. Diejenigen, die über den Mobilfunk besorgt sind, schätzen die Sicherheit geringer ein als die Unbesorgten — unabhängig von der Höhe des SAR-Wertes. Unbesehen davon zeigen unsere Ergebnisse aber vor allem, dass es zunächst darauf ankommt, den SAR-Wert bekannt zu machen, wenn man ihn als Bewertungskriterium für Mobilfunktelefone etablieren will.

The specific absorption rate (SAR) is a prominent topic in the discussion about precautionary health protection. An experimental study investigated the effect of information about various SAR values (below the existing partial body limit value of 2 W/kg) on safety judgments of potential mobile phones users. It turns out that about 94% of the participants do not know the SAR value of their own mobile phone. SAR values below existing limits are not perceived as equally safe. Rather, the lower the SAR value, the higher the perceived safety. However, a majority of the participants does not consider these SAR values to be 100% safe, even if they are clearly below the existing limits. Explicitly indicating a precautionary limit value (referring to the Federal Office for Radiation Protection or to consumer organizations) does not change this safety evaluation. As expected, safety evaluation of the SAR values is also related to the perception of mobile phone risks. Those who are concerned about mobile phone communication give lower safety judgments than the unconcerned-independent of the level of the SAR values. Irrespective of that, our results suggest that establishing the SAR value as a criterion for mobile phones depends first of all on making it known to the public.