Risk preferences refer to an individual's or group's attitude towards risk-taking when making economic decisions, reflecting how much uncertainty a person is willing to accept in pursuit of potential rewards. These preferences can range from risk-averse, where individuals prefer certain outcomes over uncertain ones, to risk-seeking, where individuals are drawn to the possibility of higher returns despite the associated risks. Understanding these preferences is crucial in neuroeconomics, as it reveals how brain activity influences decision-making under conditions of risk and uncertainty.
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