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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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Illustration of the sampling procedure in experience-based risky financial choice task.Here the participant samples a total of four times, seeing −$4.00 and $0 twice each. From this they may conclude there is a 50% chance of losing $4.00 and a 50% chance of losing nothing. The participant decided to choose the risky option and is shown the result, a loss of $4.00.
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pone.0123740.g002: Illustration of the sampling procedure in experience-based risky financial choice task.Here the participant samples a total of four times, seeing −$4.00 and $0 twice each. From this they may conclude there is a 50% chance of losing $4.00 and a 50% chance of losing nothing. The participant decided to choose the risky option and is shown the result, a loss of $4.00.

Mentions: Fig 2 presents an overview of the modified risky financial choice task. Participants were explicitly provided probability information for the certain option (e.g., “−$3.40 for sure”) but the risky option initially appeared as a pair of question marks. Participants learned outcomes and their probabilities by repeatedly sampling from the distributions of outcomes via a button press. Participants were allowed to sample as many times as they liked—no limit was placed on the number of samples drawn—but they operated under a time constraint if assigned to the high time-pressure condition. Outcomes from sampling were purely informative and had no influence on the participant’s current total. Once the participant had sampled to their satisfaction they pressed a key to indicate they wished to make their final choice and pressed one of two keys to indicate which of the two options (certain or risky) they would prefer. If the risky option was chosen, the outcome would be determined from a random draw of the probability distribution for that choice problem. For the high time pressure condition, participants were each told how much time they had for each choice, based on their practice sessions, and this information was verbally provided to participants several times before the start of the experimental portion of the study. No onscreen countdown was provided during each trial. If they participant took too long to answer, the words “NO RESPONSE DETECTED” were displayed on the screen and the program would move on to the next trial. Once all choice problems were complete the participant’s total was displayed onscreen. Finally, participants completed the same series of paper-and-pencil questionnaires as in Experiment 1, with the addition of the Behavioral Inhibition System (BIS) and Behavioral Activation System (BAS) scales [30]: a 24-item questionnaire measuring behavioural inhibition, fun/novelty seeking, responsiveness to rewards, and motivational drive. The participant groups were matched on all measures except the self-control measure, where those in the low time pressure group (M = 131.76) had higher self-reported self-control than those in the high time pressure group (M = 122.67).


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

Wegier P, Spaniol J - PLoS ONE (2015)

Illustration of the sampling procedure in experience-based risky financial choice task.Here the participant samples a total of four times, seeing −$4.00 and $0 twice each. From this they may conclude there is a 50% chance of losing $4.00 and a 50% chance of losing nothing. The participant decided to choose the risky option and is shown the result, a loss of $4.00.
© Copyright Policy
Related In: Results  -  Collection

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

pone.0123740.g002: Illustration of the sampling procedure in experience-based risky financial choice task.Here the participant samples a total of four times, seeing −$4.00 and $0 twice each. From this they may conclude there is a 50% chance of losing $4.00 and a 50% chance of losing nothing. The participant decided to choose the risky option and is shown the result, a loss of $4.00.
Mentions: Fig 2 presents an overview of the modified risky financial choice task. Participants were explicitly provided probability information for the certain option (e.g., “−$3.40 for sure”) but the risky option initially appeared as a pair of question marks. Participants learned outcomes and their probabilities by repeatedly sampling from the distributions of outcomes via a button press. Participants were allowed to sample as many times as they liked—no limit was placed on the number of samples drawn—but they operated under a time constraint if assigned to the high time-pressure condition. Outcomes from sampling were purely informative and had no influence on the participant’s current total. Once the participant had sampled to their satisfaction they pressed a key to indicate they wished to make their final choice and pressed one of two keys to indicate which of the two options (certain or risky) they would prefer. If the risky option was chosen, the outcome would be determined from a random draw of the probability distribution for that choice problem. For the high time pressure condition, participants were each told how much time they had for each choice, based on their practice sessions, and this information was verbally provided to participants several times before the start of the experimental portion of the study. No onscreen countdown was provided during each trial. If they participant took too long to answer, the words “NO RESPONSE DETECTED” were displayed on the screen and the program would move on to the next trial. Once all choice problems were complete the participant’s total was displayed onscreen. Finally, participants completed the same series of paper-and-pencil questionnaires as in Experiment 1, with the addition of the Behavioral Inhibition System (BIS) and Behavioral Activation System (BAS) scales [30]: a 24-item questionnaire measuring behavioural inhibition, fun/novelty seeking, responsiveness to rewards, and motivational drive. The participant groups were matched on all measures except the self-control measure, where those in the low time pressure group (M = 131.76) had higher self-reported self-control than those in the high time pressure group (M = 122.67).

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