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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.

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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 18174.

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Date of creation: Oct 2013
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Publication status: Published in Management Science 10 59(2013-10): pp. 2380-2391
Handle: RePEc:lmu:muenar:18174

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Cited by:
  1. Lindner, Florian, 2014. "Decision time and steps of reasoning in a competitive market entry game," Economics Letters, Elsevier, vol. 122(1), pages 7-11.
  2. Buckert, Magdalena & Oechssler, Jörg & Schwieren, Christiane, 2014. "Imitation under stress," Working Papers 0556, University of Heidelberg, Department of Economics.
  3. Marcela Ibanez & Simon Czermak & Matthias Sutter, . "Searching for a better deal ? On the influence of group decision making, time pressure and gender in a search experiment," Working Papers 2008-05, Faculty of Economics and Statistics, University of Innsbruck.
  4. Lindner, Florian & Sutter, Matthias, 2013. "Level-k reasoning and time pressure in the 11–20 money request game," Economics Letters, Elsevier, vol. 120(3), pages 542-545.

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