A Risk Perception Primer: A Narrative Research Review of the Risk Perception Literature in Behavioral Accounting and BehavioralFinance

ArXiv ID: ssrn-566802 “View on arXiv”

Authors: Unknown

Abstract

A significant topic within the behavioral finance literature is the notion of perceived risk pertaining to novice investors (i.e. individuals, finance students)

Keywords: Behavioral finance, Perceived risk, Novice investors, Investor sentiment, Risk tolerance

Complexity vs Empirical Score

• Math Complexity: 1.0/10
• Empirical Rigor: 0.5/10
• Quadrant: Philosophers
• Why: The paper is a narrative literature review focusing on conceptual definitions and theoretical frameworks of risk perception, with no original mathematical modeling, empirical testing, or implementation details.

  flowchart TD
    RQ["Research Goal:<br>Examine risk perception in<br>behavioral finance/accounting"] --> Method["Methodology:<br>Narrative literature review"]
    Method --> Inputs["Key Inputs:<br>- Novice investor studies<br>- Behavioral finance models<br>- Risk tolerance metrics"]
    Inputs --> Comp["Analysis Process:<br>Identify patterns &<br>theoretical frameworks"]
    Comp --> Outcome1["Outcome 1:<br>Perceived risk ≠<br>actual financial risk"]
    Comp --> Outcome2["Outcome 2:<br>Heuristics & biases<br>drive investor sentiment"]
    Comp --> Outcome3["Outcome 3:<br>Education gaps in<br>novice risk assessment"]