Risk Literacy and Communication (RiCoM)

Max Planck Partner Group

The Partner Group on “Boosting Risk Literacy and Communication” addresses fundamental questions about how individuals and institutions understand and communicate risk. We investigate both the cognitive processes underlying risk comprehension and the effectiveness of different communication strategies.

Over the next five years, we aim to:

• Identify core competencies for risk literacy and, particularly, explore how common households and experts conceptualize risk.
• Design innovative risk communication tools (e.g., LLM-based advisories) that account for culturally sensitive risk priorities (e.g., linguistics) and dynamics within groups (e.g., experts vs. everyday decision-makers).
• Connect theory and practice, with direct implications for how institutions communicate risk to foster informed decision-making.

The Partner Group started its work on 1 August 2024 and will be working at the MPIB until 31 July 2029. The Group is headed by Kavitha Ranganathan, a research scientist and Professor at the T. A. Pai Management Institute (TAPMI) in Manipal, India. Dr. Ranganathan works in close collaboration with projects at the Center for Adaptive Rationality (ARC), partnering with Dr. Dirk Wulff (ARC) and with Dr. Felix Rebitschek at the Harding Center for Risk Literacy at the University of Potsdam.

Biosketch

Kavitha Ranganathan is Professor in the area of Accounting, Economics and Finance at the T A Pai Management Institute (TAPMI), Manipal. Her research interests span decision-making under risk and uncertainty, (with focus on financial decisions; risk literacy, perception and communication (with an emphasis on enhancing competencies); behavioral corporate finance (focusing on IPOs, M&As, and blockholder trades); and board diversity and corporate governance issues. She has taught courses on corporate finance, investments, wealth management, and behavioral finance. She has previously worked at the National Institute of Securities Market (NISM) (NISM) and contributed to the Financial Sector Legislative Reforms Commission (FSLRC) (FSLRC). She is a Max Planck Mobility Fellowship recipient for India and has been a visiting scientist at MPIB, Berlin since 2018.

Selected Publications

Lejarraga, T., Ranganathan, K., & Wulff, D. U. (2024). Can simulated experience be harnessed to help people make investment decisions?. Judgment and Decision Making, 19, e24. https://doi.org/10.1017/jdm.2024.17

Chui, A., Ranganathan, K., Rohit, A., & Veeraraghavan, M. (2023). Momentum, reversals and liquidity: Indian evidence. Pacific-Basin Finance Journal, 82, 102193. https://doi.org/10.1016/j.pacfin.2023.102193

Ranganathan, K., & Lejarraga, T. (2021). Elicitation of risk preferences through satisficing. Journal of Behavioral and Experimental Finance, 32, 100570. https://doi.org/10.1016/j.jbef.2021.100570

Berg, N., Prakhya, S., & Ranganathan, K. (2018). A satisficing approach to eliciting risk preferences. Journal of Business Research, 82, 127-140. https://doi.org/10.1016/j.jbusres.2017.08.029