Angel Tjong and Yanuar Nanok Soenarno
The purpose of this study is to identify the effects of risk aversion, which are dishonesty, ambiguity and ethical behaviour. The first and third phase of this studies involve of completing a questionnaire to identify participant level of dishonesty and ethical behaviour. The second phase involves an experiment adapted from Ellsberg’s which we identify participant tendency of risk taking on ambiguity condition. In this study we found that dishonesty has a negative effect on risk aversion meanwhile ambiguity and ethical behaviour have positive effect on risk aversion. Even though the result of ambiguity has positive effect on risk aversion, but this result has shown an insignificant effect. In the future, researchers are suggested to emphasize the risk for indicating the ambiguity on risk aversion.
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