Time pressure and risk taking in auctions: A field experiment

Haji, Anouar El; Krawczyk, Michał; Sylwestrzak, Marta; Zawojska, Ewa

doi:10.1016/j.socec.2018.12.001

Cited by 13 publications

(11 citation statements)

References 33 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Time pressure has also been shown to increase participants' preferences for a known payoff over an uncertain alternative in the domain of gains 45 , although the inverse was true in the domain of losses. There are also similar findings from description-based gambles, where time pressure can increase risk aversion in the domain of gains 46 , with field experiments also showing that time pressure decreases risk-taking in auctions 47 .…”

Section: Limiting Decision Timesupporting

confidence: 66%

Time pressure changes how people explore and respond to uncertainty

Wu¹,

Schulz²,

Pleskac³

et al. 2021

Preprint

View full text Add to dashboard Cite

How does time pressure influence exploration and decision-making? We investigate this question using a within-subject design to manipulate decision time (limited vs. unlimited) and use a range of four-armed bandit tasks, designed to independently manipulate uncertainty and expected reward. With limited time, people have less opportunity to perform costly computations, thus shifting the cost-benefit balance of different exploration strategies. Through behavioral, reinforcement learning (RL), reaction time (RT), and evidence accumulation analyses, we show that time pressure changes how people explore and respond to uncertainty. Specifically, participants reduced their uncertainty-directed exploration under time pressure, were less value-directed, and repeated choices more often. Since our analyses relate uncertainty to slower responses and dampened evidence accumulation (i.e., drift rates), this demonstrates a resource-rational shift towards simpler, lower-cost strategies under time pressure. These results shed light on how people adapt their exploration and decision-making strategies to externally imposed cognitive constraints.

show abstract

Section: Limiting Decision Timesupporting

confidence: 66%

Time pressure changes how people explore and respond to uncertainty

Wu¹,

Schulz²,

Pleskac³

et al. 2021

Preprint

View full text Add to dashboard Cite

show abstract

“…For example, consumers are more likely to choose a retailer with smaller but more consistent discounts (higher probability, lower discount) over a deeper discounting, yet more unpredictable retailer (lower probability, higher discount;Danziger et al, 2014). Furthermore, this pattern of risk aversion tends to be even stronger when monetary gambles involve higher payoffs or stakes (e.g., hundreds vs. tens of dollars), real incentives versus hypothetical choices (Fehr-Duda, Bruhin, Epper, & Schubert, 2010;Holt & Laury, 2002;Kachelmeier & Shehata, 1992), or time pressure (El Haji, Krawczyk, Sylwestrzak, & Zawojska, 2016).…”

Section: Decision Making Under Riskmentioning

confidence: 99%

Go big or go home: Risk seeking for experiential choices

Mittal

Kapitan

Silvera

2019

J of Consumer Behaviour

View full text Add to dashboard Cite

In decision making under risk, do consumers evaluate intangible, experiential options in a choice set in the same way they evaluate tangible, material options? Prior research on prospect theory, typically using either monetary or material objects as choice options, demonstrates that consumers are risk averse for choices involving gains, with a fairly robust tendency to favor a more certain outcome even when that outcome is less desirable. The present research focuses on decision making under risk for experiential options (from movies to concert tickets to hotel stays)—identifying choices between experiential options as a realm in which prospect theory's pattern of risk aversion is weakened and sometimes reversed. Across six studies, this research demonstrates that consumers are more risk seeking for experiential choices and thus more likely to prefer more desirable options, even options that are less certain. Further, the stronger personal connection fostered by experiential (vs. material) choice options mediates risk‐seeking preferences. This work demonstrates a moderator for prospect theory and investigates the tendency toward increased risk seeking among experiential options, in this paper termed a “go big or go home” strategy. Conversely, consistent risk aversion is evidenced for choices involving material options (from clothing to accessories and furniture).

show abstract

“…In contrast, those under the risk frame made safer decisions under time pressure than participants under the risk frame that were not under time pressure. These results indicate that, rather than participants becoming globally more risk seeking (Chandler & Pronin, 2012;Madan et al, 2015) or risk avoidant (Ben Zur & Breznitz, 1981;El Haji et al, 2016), there was a reversal in risk preference, as was found by Saqib and Chan (2015). Because the methodology between the current study and that by Saqib and Chan are vastly different, it is not possible to directly compare the reversal in risk preference; that said, the reversal of risk preference under time pressure in the current study lends credence to the notion that the prospect theory's (Tversky & Kahneman, 1981) S-curve inverts.…”

Section: Discussionmentioning

confidence: 83%

“…There are findings that suggest that risk taking decreases under time pressure (Ben Zur & Breznitz, 1981;El Haji, Krawczyk, Sylwestrzak, & Zawojska, 2016) and those that suggest the opposite (Chandler & Pronin, 2012;Madan, Spetch, & Ludvig, 2015). As a result, further research is needed to understand the influence of time pressure for decisions made under gain and loss frames.…”

mentioning

confidence: 99%