Risk preference: How decision maker’s goal, current value state, and choice set work together.

When and why do people choose a more or a less risky option? To answer this question, we propose that it is essential to examine the dynamic interrelations among three factors-the decision maker's goal (e.g., promotion vs. prevention goal), the current value state (e.g., the domain of gains vs. losses), and the choice set (i.e., perceived available options). We review previous theories that highlight the significance of each of these three...