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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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Comparison of choice proportions between conditions (description vs. experience) as a function of time pressure condition and choice framing.
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pone.0123740.g004: Comparison of choice proportions between conditions (description vs. experience) as a function of time pressure condition and choice framing.

Mentions: We did not originally set out to investigate the role of time pressure on the description-experience gap. Time pressure was manipulated within subjects in Experiment 1 but between subjects in Experiment 2, making it difficult to compare the time-pressure effect directly across the two experiments. Nevertheless, a qualitative inspection of the time-pressure effects is informative (Fig 4). The upper left panel plots participants’ risk-taking on gain trails in the low time pressure condition for both experiments, and is similar to Hau et al.’s [19] findings. While we did replicate their pattern of results for the experience-based experiment, we did not in the description-based experiment and thus did not find the classic description-experience gap. Risk-taking has been found to decrease as pdesirable increases and to remain flat at the. 80 and. 90 levels in Hau et al. [19]; however, risk-taking in our study increased from the. 20 level onward. The upper right plots risk-taking in the high time pressure condition. Here we see that under high time pressure description-based choice risk-taking increases and appears more like experience-based choice (i.e., increased time pressure closes the description-experience gap and results in more experience-like behaviour in the description condition). The lower plots compare description and experience in the two time pressure conditions for loss trials. We see roughly the same pattern of results for experience-based choice as for gains, but behaviour in loss trials is essentially flat across levels of pdesirable. Thus there is tentative evidence that time pressure may close the description-experience gap in gain trials while loss trials seem less affected; however, further research is necessary before firm conclusions can be drawn.


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

Wegier P, Spaniol J - PLoS ONE (2015)

Comparison of choice proportions between conditions (description vs. experience) as a function of time pressure condition and choice framing.
© Copyright Policy
Related In: Results  -  Collection

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

pone.0123740.g004: Comparison of choice proportions between conditions (description vs. experience) as a function of time pressure condition and choice framing.
Mentions: We did not originally set out to investigate the role of time pressure on the description-experience gap. Time pressure was manipulated within subjects in Experiment 1 but between subjects in Experiment 2, making it difficult to compare the time-pressure effect directly across the two experiments. Nevertheless, a qualitative inspection of the time-pressure effects is informative (Fig 4). The upper left panel plots participants’ risk-taking on gain trails in the low time pressure condition for both experiments, and is similar to Hau et al.’s [19] findings. While we did replicate their pattern of results for the experience-based experiment, we did not in the description-based experiment and thus did not find the classic description-experience gap. Risk-taking has been found to decrease as pdesirable increases and to remain flat at the. 80 and. 90 levels in Hau et al. [19]; however, risk-taking in our study increased from the. 20 level onward. The upper right plots risk-taking in the high time pressure condition. Here we see that under high time pressure description-based choice risk-taking increases and appears more like experience-based choice (i.e., increased time pressure closes the description-experience gap and results in more experience-like behaviour in the description condition). The lower plots compare description and experience in the two time pressure conditions for loss trials. We see roughly the same pattern of results for experience-based choice as for gains, but behaviour in loss trials is essentially flat across levels of pdesirable. Thus there is tentative evidence that time pressure may close the description-experience gap in gain trials while loss trials seem less affected; however, further research is necessary before firm conclusions can be drawn.

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
Related in: MedlinePlus