Are public officials more risk-averse than private sector employees in decision-making? Interest and accountability matter

Abstract Public officials are traditionally thought to be more risk-averse than private sector employees, yet consistent empirical evidence is lacking. Prospect theory posits that individuals’ risk decision preferences are influenced by the framing of gains or losses, but it does not distinguish whether gains and losses pertain to personal or public interests. This study incorporates the type of interest with gain–loss framing to construct decision scenarios and compare risk preferences between public officials and private sector employees. In Experiment 1 (N public officials = 897, N private sector employees = 685), using a 3 (public interest vs. public–private mixed interest vs. private interest) × 2 (gain frame vs. loss frame) design, public officials were found to exhibit greater risk aversion than private sector employees when the loss frame involves the public interest, while no significant differences were observed for a gain frame involving either the public interest or private interest. Applying blame avoidance theory, accountability is positioned here as a core factor to further explore why public officials are more risk-averse than private sector employees when facing public interest losses. In Experiment 2 (N public officials = 625, N private sector employees = 630), using a 2 (reward vs. punishment-oriented accountability) × 2 (process vs. outcome-oriented accountability) design in a public interest decision-making context, public officials were found to be more risk-averse than private sector employees in the case of outcome-oriented punishment accountability. In the other three types of accountability conditions, public officials exhibited a similar risk preference to private sector employees. These findings reveal the situational factors underlying public officials’ risk aversion, and offer practical insights for designing accountability systems that effectively guide decision-making in the public sector.