Does public officials' risk preference differ in self versus public decision-making? It depends on decision framing and bet size

Abstract

Psychological distance theory and social value theory suggest there is a risk difference in self versus other decision-making. On this basis, this study explores whether public officials' risk preferences differ in self versus public decision-making. Inspired by prospect theory, the decision framing and bet size are further considered as the decision-making conditions. Through a survey experiment using Chinese public officials, this study finds that, compared with decision-making for themselves, public officials have a lower risk preference in decision-making for the public. In addition, this risk preference difference occurs under the conditions of a gain frame and larger bet size. Conversely, under the condition of a loss frame and smaller bet size, the risk preference difference disappears. This study reveals public officials' risk pattern in self versus public decision-making, which has significant implications for managing risk in public decision-making and guiding those officials to make better decisions for the public.