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Risk Tolerance and MBTI

proteanmix

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I recently found an interesting article about MBTI type and risk tolerance.

Some things I expected to see were there, like ENTPs tend to take the most risks (ISTJs and ISFJs don't), but there was also some other stuff that surprised me.

Here's where I got the article from: "Risk Aversion and Personality Type" Filbeck, Greg; Hatfield, Patricia; Horvath, Philip; Journal of Behavioral Finance; vol.6(4); 2005. pp.170-180

"Consistent with our hypothesis, we find that individuals with a preference for thinking, T, tend to be more risk-tolerant than those with a preference for feeling (F), with regard to both skew and variance. Furthermore, individuals with a slight preference for thinking (T) are almost as risk averse as those with a very clear preference for feeling (F). Risk tolerance diminishes rapidly as the MBTI scores move from a very clear preference for thinking (T) to a slight preference for thinking (T), which reflects the non-linearity of the relationships.

The judging (J)-perceiving (P) dimension of personality is significant and non-linear in explaining risk tolerance. However, contrary to our hypothesis, we find that individuals with a preference for judging (J) tended to be able to tolerate much more variance than those with a preference for perceiving (P). However, judging-perceiving differences in personality do not appear to make a difference in regard to skew preferences.

Likewise, we find that individuals with a preference for sensing (S) are willing to tolerate more upside or downside potential than those with a preference for intuition (S). The sensing-intuition dimension did not indicate any differences with regard to risk tolerance as measured by variance. Finally, we find that preferences for introversion (I) or extraversion (E) did not have significant impact on individual risk tolerance.
 

Nighthawk

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Would explain why I am pretty risk intolerant as an NP. Sucks.
 

cafe

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So is it saying that Js are as tolerant of risk as Ps, if not more so, or am I misreading?
 

ptgatsby

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So is it saying that Js are as tolerant of risk as Ps, if not more so, or am I misreading?

That's what is sounds like. It doesn't reflect any of my past, that's for sure. Back when I was doing finance, I'm pretty sure I could say that at least as far as financial risk goes (variance), Ps were far more accepting. What I do know is that SJs would accept risk once presented, regardless of outcome, where NPs would get cold feet. Perhaps that is what they measured... interesting. I'll have to read the whole thing to see if I'm simply mistaken.
 

SolitaryWalker

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Keirsey reports that ENTPs are the biggest risk takers.

SPs should be too, but because they tend to be less far-sighted than the ENTPs, they run into problems when taking risks. So they can not do this consistently.

Also, another way to think of this is that ENTPs frequently see a myriad of possibilities to happen in their lives and tend to be less afraid of making mistakes because they usually have plenty to fall back on in case something goes south on them.

They tend to do this a lot in relationships especially, since they tend not to value the emotional connection as much as the ENFPs, and they are experiential learners, they take risks for the sake of learning. And usually have few regrets about that because, in the worst case scenario, they will lose a relationship (usually a casual friendship) that they could easily get replaced in the future.

INTPs may be less willing to take risks simply because they can not afford to make as many mistakes because they have less opportunities in their lives.

But again, the main reason why ENTPs would be the biggest risk takers is because Ne loves adventures (just like Se, and it can see more than the Se and the ENTPs carry their risks out a bit smoother because Ne often takes variables in consideration that escape the notice of Se) and is able to carry them out in a congenial fashion, as well as that ENTPs are less likely to be paralyzed by the fear of making a mistake because they could more easily compensate for their error, or in the worst case move on while incurring as least deleterious of injuries as possible.

As for more on why the INTP could be averse to risk-taking--Introverted Thinking is an Introverted Judging function---it is profondly different from Extroverted Intuition--an Extroverted Perceiving function. If the latter is not involved in the diet of the INTP's thought, his behavior may appear very 'un-NPish'. This is why it is easy for IPs to get 'stuck in a rut'.

As for saying that Sensors are more likely to take risks, they are probably referring to the 'SPish risks'--everyday kind of risks that we all can take. NPs would probably say they are not worthwhile because they see the big picture. Yet SPs just may take them on impulse.

Though as far as taking necessary risks is concerned, ENTPs would be the most willing to do this, because they could do well to assess the potential outcomes that could ensue from this.

INTJs may be able to do this better, but I doubt it, since their Ni vision is less in tune with reality than Ne, and their J makes the more cautious.

As for Ts being more inclined to take risks--this could be explained in terms of them being more competent in the world of decision-making, as it is clear that in the Western society there will be more situations where you are more likely to be forced to make impersonal judgments than personal.
 

ptgatsby

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Well, after skimming it, I'm not that impressed. It never helps when the first thing I see is the E:I divide at 75:25. I have a hard time trusting anyone when using these kinds of figures.

But mostly it's the risk test at the bottom. It's not an objective measure of risk in real life situations, but rather a test of requirements - this could easily bias the answers towards SJs (who would "require" a certain level of wealth, and be willing to risk everything to get it) rather than the non-material NPs who don't require it.

I don't mind the sample size of 68... but to control for 9 factors at the same time, while not impossible, makes me skeptical.

But all that aside, I'm so strongly NP that I should be drastically risk averse, when I'm anything but.

All that said, the findings, for what they are, seem solid.

(They also disagree with FFM research: http://facultyresearch.london.edu/docs/risk.ps.pdf )
 

Maverick

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This is inconsistent with past research, such as the one that ptgatsby links to, so I would be inclined to be somewhat skeptical of the article before reading the methods section.
 

niffer

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:) I like adventures..
 

Shimpei

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Oh, damn, here's your SJ who tends to run away from taking any risks.
 

cafe

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Hmm. I'm generally more comfortable with risk-taking and change than my INTP partner is.
 

The Ü™

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I'm very risk averse. I tend to either imagine all the things that could go wrong or imagine what I think it will be like and I'm either underwhelmed or overwhelmed because the experience was nothing like I conceptualized it in my head.

Even when just I want to do a simple task like go to the store or something, I always conceptualize it in my head before I get up and do it.
 

Totenkindly

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I'm very risk averse. I tend to either imagine all the things that could go wrong or imagine what I think it will be like and I'm either underwhelmed or overwhelmed because the experience was nothing like I conceptualized it in my head. Even when just I want to do a simple task like go to the store or something, I always conceptualize it in my head before I get up and do it.

Yes, same here. I spent most of my life preconceptualizing situations and avoiding those with risk involved, so I wouldn't lose any ground. (Uggh, I even remember "rehearsing" simple phone calls a few times before making them.)

It's not a great way to live, and I am moving past it. (Risk is risk; you don't get anywhere without taking some; and I need to trust my ability to flex and compensate for problems as I go, rather than trying to mastermind the perfect approach.)

I wouldn't ignore the impact of environmental influences on personal development; those who grow up in unstable situations or feel compelled to be "perfect" all the time will be impacted towards self-preservation and potentially risk-avoidance.
 

proteanmix

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I'm curious why people are resisting the idea that a J may be more risk tolerant than a P? Is this ingrained into our MBTI psyche that P would be more tolerant of it?

I think a J may be more risk tolerant because they have more than one plan that they can fall back on, which may relieve some aversion to risk. They may be more prone to actively seek out alternatives if the plan goes awry, and I can see a need for closure forcing a J to make some decisions that make a risk less risky. Basically damage control.

And personally, risk generally doesn't bother me as long as I think I have time to wiggle myself out of whatever goes wrong. When I jump on things as soon as it goes wrong (if it goes wrong) it tends to work in my favor. It makes me more confident that I can handle a risk when I need to take it, making me less hesitant about risks.
 
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cafe

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I expect things to go wrong, so I make Plans A, B, C, etc. take a deep breath and jump.

My hubby fears things will go wrong, and compulsively gathers ever more information, trying to make sure Plan A is perfect. If Plan A ever actually gets implemented, the first thing that goes wrong is really hard for him to get over because his perfect plan has been ruined.
 

Totenkindly

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My hubby fears things will go wrong, and compulsively gathers ever more information, trying to make sure Plan A is perfect. If Plan A ever actually gets implemented, the first thing that goes wrong is really hard for him to get over because his perfect plan has been ruined.

I empathize with Gruffy. That's what I have usually done too.

(Although I do have a release valve: If I wear myself down trying too hard to develop Plan A, at some point I will just lose it and throw caution to the wind, jumping in head-first and swimming like mad. The good part is that I have prepared so well trying to get Plan A set up that I actually do have the ability to swim in real-time and make it through the mess, usually... which gives added confidence for the future.)
 

SolitaryWalker

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I'm curious why people are resisting the idea that a J may be more risk tolerant than a P? Is this ingrained into our MBTI psyche that P would be more tolerant of it?

I think a J may be more risk tolerant because they may feel that they may have more than one plan that they can fall back on, which may relieve some aversion to risk. They may be more prone to actively seek out alternatives if the plan goes awry, and I can see a need for closure forcing a J to make some decisions to make that make a risk less risky, basically damage control.

And personally, risk generalyl doesn't bother me as long as I think I have time to wiggle myself out of whatever goes wrong. When I jump on things as soon as it goes wrong (if it goes wrong) it tends to work in my favor. It makes me more confident that I can handle a risk when I need to take the next one, which makes me less hesitant about taking the next one.

Js may be less risk-averse because they'd be in a better position to take healthy risks while Ps, after having been forced to pay for their light-hearted attitude towards serious matters actually became less inclined to take risks afterwards. So in the end we still have Js who always took few risks, and yet Ps who are now conditioned to take even less, as unnatural as it may be to them.
 

ptgatsby

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I'm curious why people are resisting the idea that a J may be more risk tolerant than a P? Is this ingrained into our MBTI psyche that P would be more tolerant of it?

For me;

1) It doesn't reflect my own experiences, both in finance and outside of it.

2) It doesn't mesh up with other research done, which shows pretty much the opposite, consistently, across multiple measures of risk.

3) The risk assessment they used in that original study is flawed (IMO).

One of the main reasons is that Ps are generally more risk tolerant in general life decisions - since risk is expressed as change - Ps are generally far more accepting of change than Js.
 

meanlittlechimp

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Hmm. I'm generally more comfortable with risk-taking and change than my INTP partner is.

Yeah I find INFJs have more risk tolerance than INTPs as well. I'm not sure as to why it's the case but it's something I've observed in my small sample size of people I know well. 3 INFJs, 4 INTPs.

Additionally, I find ENFPs to just as many "risky" things as an ENTP - but sometimes, I feel like they aren't always aware of the risk. Often, I get the sense their inate optimism leads them to believe things are going to work out for them (without believing the risk is there).
 

meanlittlechimp

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I expect things to go wrong, so I make Plans A, B, C, etc. take a deep breath and jump.

My hubby fears things will go wrong, and compulsively gathers ever more information, trying to make sure Plan A is perfect. If Plan A ever actually gets implemented, the first thing that goes wrong is really hard for him to get over because his perfect plan has been ruined.

Is your husband an INTP? I found the same thing when I had a startup with an ENTJ and an INTP. The INTP got really crazy when there were some bad indicators in the first month of launch. The ENTJs, I've worked it showed more risk tolerance than the INTP as well.

It may have something to do with Extroverts having a higher stimulus overload threshold (but that wouldn't explain why the INFJs I know exhibit more risk prone behavior).
 

Totenkindly

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It may have something to do with Extroverts having a higher stimulus overload threshold (but that wouldn't explain why the INFJs I know exhibit more risk prone behavior).

I think you can credit part of it to the philosophical differences between all the J's you describe and the INTP mentality.

INTPs hate to impose on the process and/or fight against the flow of things. They go WITH the flow instead and try to find the inherent pattern within. One of the reasons I think INTPs isolate themselves in order to preserve their autonomy is because they have TROUBLE fighting against the impositions of others; to not interfere with others, yet to preserve their autonomy, they withdraw.

The J's you mention exert themselves in order to implement control and have confidence that their efforts are allowable AND effective. They tend to not have as much issue with simply overriding other things.

INTPs also "predict" the future state of something by how it seems to logically work in the past, plus its current state. The INTP cannot interfere with the machine, they simply observe the machine and predict its state; this is the detached third-party observer effect. And if the INTP sees that the outcome is probably negative, they will simply try a different strategy if possible, rather than engaging the problem and trying to change the parameters or just changing things through sheer force of energy and will. If they CAN'T find an effective strategy, they would rather not engage at all because all paths seem fraught with failure.

J's and SPs seem much more inclined to change the situation by exerting control/energy over it. NTJs will strategize first, but will still Te their way through it.
 
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