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  • The authors would like to thank FinaMetrica Limited for providing access to its database and Geoff Davey, CEO for information on the operation of their its profiling system. Thanks are also extended to Vanguard Australia and particularly to Robin Bowerman for his continuing support of this project. We also thank Nicki Chua for her assistance in setting up the experiment. We are extremely grateful for the encouragement of the former JFR editor, William T. Moore, and for the comments and insights of John List (the referee), Karen Benson, Philip Brown, Paul De Lange, Robert Durand, Paul Gerrans, Phil Gray, Terry Hallahan, Glenn Harrison, Rob Hudson, Chris Lambert, Mike McKenzie, Andy Marshall, Rick Newby, Barry Oliver, Vanitha Ragunathan, and Richard Scheelings and to seminar participants at Monash University, RMIT, and the University of Western Australia. The financial assistance provided by an ARC Linkage grant (LP0560992), together with faculty and departmental support, is also gratefully acknowledged.


We explore the linkage between financial risk tolerance (FRT) and risk aversion. To do this, we obtain FRT scores from a psychometrically validated survey and conduct a battery of online lottery choice experiments involving the same nonstudent participants. We contrast: real and hypothetical payoffs, low and high stakes, decisions involving gains and losses, and order effects. Our key finding is that the two approaches to analyzing decision making under uncertainty are strongly aligned. We present evidence that this is particularly the case for the female participants in our sample and when high-stake gambles are employed.