scholarly journals The Effect of Time Pressure on Risky Financial Decisions from Description and Decisions from Experience

2021 ◽  
Author(s):  
Pete Wegier ◽  
Julia Spaniol
Keyword(s):  
Decision Making ◽  
Opposite Direction ◽  
Risk Taking ◽  
Time Pressure ◽  
Time Constraints ◽  
Decisions From Experience ◽  
Financial Decisions ◽  
Risk Seeking ◽  
Gain And Loss ◽  
Decision Tasks

Time pressure has been found to impact decision making in various ways, but studies on the effects time pressure in risky financial gambles have been largely limited to description-based decision tasks and to the gain domain. We present two experiments that investigated the effect of time pressure on decisions from description and decisions from experience, across both gain and loss domains. In description-based choice, time pressure decreased risk seeking for losses, whereas for gains there was a trend in the opposite direction. In experience-based choice, no impact of time pressure was observed on risk-taking, suggesting that time constraints may not alter attitudes towards risk when outcomes are learned through experience.

scholarly journals The Effect of Time Pressure on Risky Financial Decisions from Description and Decisions from Experience

2021 ◽  
Author(s):  
Pete Wegier ◽  
Julia Spaniol
Keyword(s):  
Decision Making ◽  
Opposite Direction ◽  
Risk Taking ◽  
Time Pressure ◽  
Time Constraints ◽  
Decisions From Experience ◽  
Financial Decisions ◽  
Risk Seeking ◽  
Gain And Loss ◽  
Decision Tasks

Time pressure has been found to impact decision making in various ways, but studies on the effects time pressure in risky financial gambles have been largely limited to description-based decision tasks and to the gain domain. We present two experiments that investigated the effect of time pressure on decisions from description and decisions from experience, across both gain and loss domains. In description-based choice, time pressure decreased risk seeking for losses, whereas for gains there was a trend in the opposite direction. In experience-based choice, no impact of time pressure was observed on risk-taking, suggesting that time constraints may not alter attitudes towards risk when outcomes are learned through experience.

scholarly journals Rapid makes risky: Time pressure increases risk seeking in decisions from experience

2015 ◽  
Vol 27 (8) ◽  
pp. 921-928 ◽  
Author(s):  
Christopher R. Madan ◽  
Marcia L. Spetch ◽  
Elliot A. Ludvig
Keyword(s):  
Time Pressure ◽  
Decisions From Experience ◽  
Risk Seeking

scholarly journals Comparative inspiration: From puzzles with pigeons to novel discoveries with humans in risky choice

2018 ◽  
Author(s):  
Christopher R Madan ◽  
Elliot Andrew Ludvig ◽  
Marcia L Spetch
Keyword(s):  
Decision Making ◽  
Research Program ◽  
Risky Choice ◽  
Comparative Perspective ◽  
Risk And Uncertainty ◽  
Decisions From Experience ◽  
Risk Seeking ◽  
Relative Gains ◽  
Underlying Processes ◽  
Risky Decisions

Both humans and non-human animals regularly encounter decisions involving risk and uncertainty. This paper provides an overview of our research program examining risky decisions in which the odds and outcomes are learned through experience in people and pigeons. We summarize the results of 15 experiments across 8 publications, with a total of over 1300 participants. We highlight 4 key findings from this research: (1) people choose differently when the odds and outcomes are learned through experience compared to when they are described; (2) when making decisions from experience, people overweight values at or near the ends of the distribution of experienced values (i.e., the best and the worst, termed the “extreme-outcome rule”), which leads to more risk seeking for relative gains than for relative losses; (3) people show biases in self-reported memory whereby they are more likely to report an extreme outcome than an equally-often experienced non-extreme outcome, and they judge these extreme outcomes as having occurred more often; and (4) under certain circumstances pigeons show similar patterns of risky choice as humans, but the underlying processes may not be identical. This line of research has stimulated other research in the field of judgement and decision making, illustrating how investigations from a comparative perspective can lead in surprising directions.

scholarly journals Daily and momentary sensation-seeking and urgency in young adults: Associations with risk-taking and sleep

2021 ◽  
Author(s):  
Amanda Lee McGowan ◽  
Emily B. Falk ◽  
Perry Zurn ◽  
Danielle S Bassett ◽  
David M. Lydon-Staley
Keyword(s):  
Decision Making ◽  
Sleep Quality ◽  
Young Adulthood ◽  
Risk Taking ◽  
Sensation Seeking ◽  
Daily Life ◽  
Daily Diary ◽  
Positive Outcomes ◽  
Diary Data ◽  
Risk Seeking

Fluctuations in sensation-seeking may affect risk-taking, necessitating a consideration of these fluctuations as well as their antecedents. In 21-day daily diary data (n=78 participants; mean age=21.18, SD=1.75; 80.77% women), days of higher than usual sensation-seeking are also days of higher than usual risk-taking and are more likely to be alcohol use days than days of lower than usual sensation-seeking. On average, outcomes of risky behavior are rated positively. In 6-times a day experience-sampling data from the same participants over the same 21 days, we examine sleep as potential antecedent of fluctuations in sensation-seeking. We find that sensation-seeking peaks higher and earlier following nights of higher than usual sleep quality relative to days following average and lower than usual sleep quality. Together, findings suggest that seeking out novel experiences in daily life without rash decision-making leads to positive outcomes in young adulthood and positive risk-seeking may be supported by sleep quality.

Neural Mechanisms of Risky Decision Making in Monetary Gain and Loss Situations

2013 ◽  
Vol 41 (10) ◽  
pp. 1725-1736 ◽  
Author(s):  
Fei He ◽  
Hao Guan ◽  
Zhijing Zhao ◽  
Rong Cao
Keyword(s):  
Decision Making ◽  
Event Related Potentials ◽  
Brain Regions ◽  
Neural Basis ◽  
Chinese Adults ◽  
Risky Decision ◽  
Risk Seeking ◽  
Related Potentials ◽  
Gain And Loss ◽  
Monetary Gain

Our aim was to investigate the cognitive neural basis, the behavioral characteristics, and the cognitive process of decision making with a group of 30 healthy Chinese adults. Two conditions with tasks drawn from prospect theory allowed us to examine how different risky decisions and related behaviors activate specific brain regions. Participants completed 2 decision tasks in which the amount of possible monetary gain and loss differed. Event-related potentials recorded for analysis during these tasks involved the N2 and P3 components. Participants' behaviors showed risk aversion in the monetary gain condition and risk seeking in the loss condition. Reaction time for risk-seeking decisions in a loss condition was significantly slower than for the same decision in a gain condition. The reactions to uncertainty shared a general neural network, but reactions were activated with different intensities in certain brain regions.

scholarly journals Profit Reinvestment: Main Motives Supporting Financial Decisions

e-Finanse ◽  
2019 ◽  
Vol 15 (4) ◽  
pp. 34-43
Author(s):  
Pavla Pokorná ◽  
Jarmila Šebestová
Keyword(s):  
Decision Making ◽  
Pilot Study ◽  
Decision Tree ◽  
Competitive Advantage ◽  
Risk Taking ◽  
Decision Tree Model ◽  
Economic Literacy ◽  
Tree Model ◽  
Financial Decisions ◽  
Specific Factors

AbstractReinvestment decisions are based on basic the economic literacy of entrepreneurs because they do not want to affect future liquidity or development activities. The main goal of the article is to suggest a simple decision tree model to describe profit reinvestments in a general way based on results of a primary pilot study (128 interviews), where reinvestment behaviour is affected by specific factors like risk taking, competitive advantage or business experience. After that a decision-making tree is suggested to explain the process of reinvestment as determined by the manager.

scholarly journals Gambling on an empty stomach: Hunger modulates preferences for learned but not described risks

2021 ◽  
Author(s):  
Maaike M.H. van Swieten ◽  
Rafal Bogacz ◽  
Sanjay G. Manohar
Keyword(s):  
Decision Making ◽  
Risk Aversion ◽  
Risk Taking ◽  
Risk Preferences ◽  
The Other ◽  
Empty Stomach ◽  
Metabolic State ◽  
Strongly Coupled ◽  
Risk Seeking ◽  
Other Hand

AbstractWe assess risks differently when they are explicitly described, compared to when we learn directly from experience, suggesting dissociable decision-making systems. Our needs, such as hunger, could globally affect our risk preferences, but do they affect described and learned risks equally? On one hand, explicit decision-making is often considered flexible and contextsensitive, and might therefore be modulated by metabolic needs. On the other hand, implicit preferences learned through reinforcement might be more strongly coupled to biological drives. To answer this, we asked participants to choose between two options with different risks, where the probabilities of monetary outcomes were either described or learned. In agreement with previous studies, rewarding contexts induced risk-aversion when risks were explicitly described, but risk-seeking when they were learned through experience. Crucially, hunger attenuated these contextual biases, but only for learned risks. The results suggest that our metabolic state determines risk-taking biases when we lack explicit descriptions.

Beyond risk seeking and risk aversion: personality and the dual nature of economic risk taking

2001 ◽  
Vol 15 (1_suppl) ◽  
pp. S105-S122 ◽  
Author(s):  
Tomasz Zaleskiewicz
Keyword(s):  
Risk Aversion ◽  
Risk Taking ◽  
Sensation Seeking ◽  
Reliability And Validity ◽  
Empirical Examination ◽  
Dual Nature ◽  
Financial Decisions ◽  
Risk Seeking ◽  
Human Attitude ◽  
Personality Features

In economic theories it is assumed that risk aversion is a typical human attitude toward risk, and differences are determined by the curvature of the utility function. The results of psychological studies have indicated, however, that people differ in how they make financial decisions under uncertainty and what motivates them to take economic risks. This paper introduces two kinds of risk taking, instrumental risk taking and stimulating risk taking, and reports their empirical examination in two studies. The purpose of these studies was to test the reliability and validity of the Stimulating–Instrumental Risk Inventory—a method used to measure the two risk taking tendencies. It was found that instrumental risk taking is related to risk preference in the investment domain and is determined by personality traits connected with orientation toward the future, the tendency to think rationally, impulsivity, and sensation seeking. Stimulating risk taking was found to be related to the preference for recreational, ethical, health, and gambling risks and was associated with personality features connected with paratelic orientation, arousal seeking, impulsivity, and strong sensation seeking. Copyright © 2001 John Wiley & Sons, Ltd.

Deciding the Adequacy of a Set of Tests for an Specific Assessment Situation. Decision-making Strategies

1996 ◽  
Vol 12 (1) ◽  
pp. 14-22
Author(s):  
R. Esteve ◽  
A. Godoy
Keyword(s):  
Decision Making ◽  
Time Pressure ◽  
Response Mode ◽  
Information Load ◽  
Variable Pattern ◽  
Mode Effects ◽  
Moderator Effects ◽  
Specific Assessment ◽  
Information Board ◽  
Decision Importance

The aim of the present paper was to test the effects of response mode (choice vs. judgment) on decision-making strategies when subjects were faced with the task of deciding the adequacy of a set of tests for a specific assessment situation. Compared with choice, judgment was predicted to lead to more information sought, more time spent on the task, a less variable pattern of search, and a greater amount of interdimensional search. Three variables hypothesized as potential moderators of the response mode effects are also studied: time pressure, information load and decision importance. Using an information board, 300 subjects made decisions (choices and judgments) on tests for a concrete assessment situation, under high or low time pressure, high or low information load, and high or low decision importance. Response mode produced strong effects on all measures of decision behavior except for pattern of search. Moderator effects occurred for time pressure and information load.

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