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The effect of time pressure on risky financial decisions from description and decisions from experience.

Wegier P, Spaniol J - PLoS ONE (2015)

Bottom Line: 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.

View Article: PubMed Central - PubMed

Affiliation: Department of Psychology, Ryerson University, Toronto, Ontario, Canada.

ABSTRACT
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.

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Experiment 1—Proportion of risky choices taken as a function of the choice framing (gains vs. losses) and the time-pressure condition.Error bars indicate standard errors of the mean.
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pone.0123740.g001: Experiment 1—Proportion of risky choices taken as a function of the choice framing (gains vs. losses) and the time-pressure condition.Error bars indicate standard errors of the mean.

Mentions: In the first analysis, we collapsed across the levels of payoff variability and conducted a 2 (time pressure) × 2 (framing) × 4 (pdesirable: 0.10, 0.20, 0.80, 0.90) repeated measures ANOVA on the proportion of risky choices. The main effects of time pressure and framing were not significant. However, there was a significant Time Pressure × Framing interaction, F(1, 39) = 8.29, p = .006, partial η2 = .18 (Fig 1). Follow-up t tests showed a marginally nonsignificant effect of time pressure on the proportion of risky choices taken for gain trials, t(39) = 1.74, p = .09, d = .25, such that participants showed a tendency to choose the risky option more often in the high time-pressure condition (M = .40) than in the low time-pressure condition (M = .34). The opposite pattern was observed for loss trials, t(39) = 2.13, p = .039, d = .34, where participants chose the risky option more often in the low time-pressure condition (M = .38) than in the high time-pressure condition (M = .32). A significant main effect of pdesirable was found, F(1.40, 54.47) = 4.06, p = .036, partial η2 = .09 (Table 4), after correction for non-sphericity using the Greenhouse-Geisser estimate (ε = .47). This main effect was qualified by two significant interactions. First, the Time Pressure × pdesirable interaction was significant, F(3, 117) = 3.45, p = .019, partial η2 = .08. However, pairwise contrasts between time pressure conditions for each level of pdesirable were not significant. Second, the Framing × pdesirable interaction was significant, F(1.96, 76.45) = 6.32, p = .001, partial η2 = .14, after correction for non-sphericity using the Greenhouse-Geisser estimate (ε = .65). Pairwise contrasts between time pressure conditions for each level of pdesirable revealed significant differences two levels. At the. 20 level participants took the risky option more often for losses (M = .33) than for gains (M = .23), while at the. 90 level participants took the risky option more often for gains (M = .52) than for losses (M = .34).


The effect of time pressure on risky financial decisions from description and decisions from experience.

Wegier P, Spaniol J - PLoS ONE (2015)

Experiment 1—Proportion of risky choices taken as a function of the choice framing (gains vs. losses) and the time-pressure condition.Error bars indicate standard errors of the mean.
© Copyright Policy
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC4401744&req=5

pone.0123740.g001: Experiment 1—Proportion of risky choices taken as a function of the choice framing (gains vs. losses) and the time-pressure condition.Error bars indicate standard errors of the mean.
Mentions: In the first analysis, we collapsed across the levels of payoff variability and conducted a 2 (time pressure) × 2 (framing) × 4 (pdesirable: 0.10, 0.20, 0.80, 0.90) repeated measures ANOVA on the proportion of risky choices. The main effects of time pressure and framing were not significant. However, there was a significant Time Pressure × Framing interaction, F(1, 39) = 8.29, p = .006, partial η2 = .18 (Fig 1). Follow-up t tests showed a marginally nonsignificant effect of time pressure on the proportion of risky choices taken for gain trials, t(39) = 1.74, p = .09, d = .25, such that participants showed a tendency to choose the risky option more often in the high time-pressure condition (M = .40) than in the low time-pressure condition (M = .34). The opposite pattern was observed for loss trials, t(39) = 2.13, p = .039, d = .34, where participants chose the risky option more often in the low time-pressure condition (M = .38) than in the high time-pressure condition (M = .32). A significant main effect of pdesirable was found, F(1.40, 54.47) = 4.06, p = .036, partial η2 = .09 (Table 4), after correction for non-sphericity using the Greenhouse-Geisser estimate (ε = .47). This main effect was qualified by two significant interactions. First, the Time Pressure × pdesirable interaction was significant, F(3, 117) = 3.45, p = .019, partial η2 = .08. However, pairwise contrasts between time pressure conditions for each level of pdesirable were not significant. Second, the Framing × pdesirable interaction was significant, F(1.96, 76.45) = 6.32, p = .001, partial η2 = .14, after correction for non-sphericity using the Greenhouse-Geisser estimate (ε = .65). Pairwise contrasts between time pressure conditions for each level of pdesirable revealed significant differences two levels. At the. 20 level participants took the risky option more often for losses (M = .33) than for gains (M = .23), while at the. 90 level participants took the risky option more often for gains (M = .52) than for losses (M = .34).

Bottom Line: 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.

View Article: PubMed Central - PubMed

Affiliation: Department of Psychology, Ryerson University, Toronto, Ontario, Canada.

ABSTRACT
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.

Show MeSH