Behavioral Time Choices in Speed-Accuracy Trade-offs

In many economic contexts, people need to solve trade-offs between doing an activity (e.g., solving a task) faster and doing it better. While time choices in speed-accuracy trade-offs have been extensively studied in cognitive science for motor-response and perception tasks, little evidence is available for more deliberate economic decision-making, where people’s choices often fail to maximize payoffs. Conversely, the impact of behavioral biases – key explanans of said failure – on time choices has yet to be explored. We present a theoretical model linking time choices in speed-accuracy trade-offs to an agent’s abilities, subjective beliefs and uncertainty attitudes. We test the predictions of the model in an experiment for two distinct (but otherwise identical) environments: prospective time choices before solving a task and simultaneous time choices while solving a task. Correlational analyses indicate that overconfidence (in one’s ability) and uncertainty aversion affect time choices in the prospective but not in the simultaneous environment. Probabilistic structural estimations, aimed at capturing the optimization process on the individual level, support this conclusion. This suggests that long-known behavioral biases influence decisions beyond classical domains like risk and intertemporal choice, but may “play out“ differently in planned versus actual actions.