In line with the famous Prospect Theory by D. Kahneman, three main factors can trigger irrational risk-taking behaviors:
Risk perception, which relates to how individuals implicitly evaluate the probability of an event
Risk preference, which relates to the preference for a risky, uncertain payment over a certain payment
Loss aversion, which relates to the aversion for negative outcomes
Numerous cognitive biases can influence these three parameters. Most of them are unconscious and are generated by our system 1 of thinking.
We have developed an algorithm to surface and measure cognitive biases related to risk-taking. It is highly predictive.