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

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  • Pete Wegier
  • Julia Spaniol

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.

Suggested Citation

  • Pete Wegier & Julia Spaniol, 2015. "The Effect of Time Pressure on Risky Financial Decisions from Description and Decisions from Experience," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-16, April.
    • Handle: RePEc:plo:pone00:0123740
    DOI: 10.1371/journal.pone.0123740
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    References listed on IDEAS

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    Cited by:

    1. Benjamin J. Dyson, 2019. "Behavioural Isomorphism, Cognitive Economy and Recursive Thought in Non-Transitive Game Strategy," Games, MDPI, vol. 10(3), pages 1-14, August.
    2. Gelman, Sergey & Kliger, Doron, 2021. "The effect of time-induced stress on financial decision making in real markets: The case of traffic congestion," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 814-841.
    3. Markus Jung & Mischa Seiter, 2021. "Towards a better understanding on mitigating algorithm aversion in forecasting: an experimental study," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(4), pages 495-516, December.
    4. Banerjee, Priyodorshi & Das, Tanmoy, 2021. "Risky decision under laboratory deadline with experience and indirect self-selection," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    5. Gelman, Sergey & Kliger, Doron, 2016. "Time-Induced Stress Effect on Financial Decision Making in Real Markets: The Case of Traffic Congestion," VfS Annual Conference 2016 (Augsburg): Demographic Change 145915, Verein für Socialpolitik / German Economic Association.
    6. repec:cup:judgdm:v:17:y:2022:i:5:p:1072-1093 is not listed on IDEAS
    7. repec:jdm:journl:v:17:y:2022:i:5:p:1072-1093 is not listed on IDEAS

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