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Motivating Risky Choices Increases Risk Taking

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  • Ennio Bilancini
  • Leonardo Boncinelli
  • Lorenzo Spadoni

Abstract

We study the impact of the mode of cognition on risk taking. In an online experiment we ask participants to make a simple decision involving risk. In the control group no manipulation is made, while in the treatment group we exogenously manipulate the mode of cognition by asking subjects to write down a text that motivates their risky choice before any decision is actually made. Such motivation treatment is meant to induce more reflection upon the decision to be made. Our results show an effect of the motivation treatment on risk taking, suggesting that higher reflection makes subjects more prone to risk taking. The effect is stronger if we consider only subjects who imperfectly understand the probability distribution implied by the simple choice task. Based on our experimental findings, we suggest that reflection and comprehension might be substitutes when individuals make decisions involving risk.

Suggested Citation

  • Ennio Bilancini & Leonardo Boncinelli & Lorenzo Spadoni, 2020. "Motivating Risky Choices Increases Risk Taking," Working Papers CESARE 1/2020, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    • Handle: RePEc:lui:cesare:2001
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    References listed on IDEAS

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    Cited by:

    1. Bilancini, Ennio & Boncinelli, Leonardo & Guarnieri, Pietro & Spadoni, Lorenzo, 2023. "Delaying and motivating decisions in the (Bully) dictator game," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).

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    More about this item

    Keywords

    dual process; risk taking; motivation; deliberation; intuition; bomb risk elicitation task;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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