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Tempus Fugit: Time pressure in risky decisions

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  • Kocher, Martin G.
  • Pahlke, Julius
  • Trautmann, Stefan T.

Abstract

We study the effects of time pressure on risky decisions for pure gain prospects, pure loss prospects, and mixed prospects involving both gains and losses. In two experiments we find that time pressure has no effect on risk attitudes for gains, but increases risk aversion for losses. For mixed prospects, subjects become simultaneously more loss averse and more gain seeking under time pressure, depending on the framing of the prospects. The results suggest the importance of aspiration levels, and thus the overall probability to break even, under time pressure. We discuss the implications of our findings for decision-making situations that involve time pressure.

Suggested Citation

  • Kocher, Martin G. & Pahlke, Julius & Trautmann, Stefan T., 2013. "Tempus Fugit: Time pressure in risky decisions," Munich Reprints in Economics 18174, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenar:18174
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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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