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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 2—Number of samples taken for each level of pdesirable as a function of choice framing (gains vs. losses).Error bars indicate standard errors of the mean.
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pone.0123740.g003: Experiment 2—Number of samples taken for each level of pdesirable as a function of choice framing (gains vs. losses).Error bars indicate standard errors of the mean.

Mentions: Information search was operationalized as the number of samples participants drew before making a choice. First, we collapsed across the levels of payoff variability and conducted a 2 (time pressure) × 2 (framing) × 4 (pdesirable) mixed-design ANCOVA with Self-Control as a covariate to investigate degree of information search. The main effect of time pressure was significant, F(1, 46) = 7.08, p = .01, partial η2 = .13, with participants drawing more samples during the low time-pressure condition (M = 12.9) than during the high time-pressure condition (M = 8.6). The main effects of framing and pdesirable were not significant and neither were any interactions with time pressure. A significant Framing × pdesirable interaction was found, F(2.07, 95.39) = 8.81, p < .001, partial η2 = .16, after correction for non-sphericity using the Greenhouse-Geisser estimate (ε = .69). Planned contrasts revealed a significant linear relationship during gain trials, F(1, 46) = 21.00, p < .001, partial η2 = .31, with participants sampling less often as the level of pdesirable increased. There were no significant relationships for loss trials (Fig 3).


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

Wegier P, Spaniol J - PLoS ONE (2015)

Experiment 2—Number of samples taken for each level of pdesirable as a function of choice framing (gains vs. losses).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.g003: Experiment 2—Number of samples taken for each level of pdesirable as a function of choice framing (gains vs. losses).Error bars indicate standard errors of the mean.
Mentions: Information search was operationalized as the number of samples participants drew before making a choice. First, we collapsed across the levels of payoff variability and conducted a 2 (time pressure) × 2 (framing) × 4 (pdesirable) mixed-design ANCOVA with Self-Control as a covariate to investigate degree of information search. The main effect of time pressure was significant, F(1, 46) = 7.08, p = .01, partial η2 = .13, with participants drawing more samples during the low time-pressure condition (M = 12.9) than during the high time-pressure condition (M = 8.6). The main effects of framing and pdesirable were not significant and neither were any interactions with time pressure. A significant Framing × pdesirable interaction was found, F(2.07, 95.39) = 8.81, p < .001, partial η2 = .16, after correction for non-sphericity using the Greenhouse-Geisser estimate (ε = .69). Planned contrasts revealed a significant linear relationship during gain trials, F(1, 46) = 21.00, p < .001, partial η2 = .31, with participants sampling less often as the level of pdesirable increased. There were no significant relationships for loss trials (Fig 3).

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