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Tempus Fugit : Time Pressure in Risky Decisions

Listed author(s):
  • Martin G. Kocher

    ()

    (Department of Economics, University of Munich, 80539 Munich, Germany; Department of Economics, University of Gothenburg, 40530 Gothenburg, Sweden; and CESifo Munich, 81679 Munich, Germany)

  • Julius Pahlke

    ()

    (DIW econ GmbH, 10117 Berlin, Germany)

  • Stefan T. Trautmann

    ()

    (Deparment of Economics, CentER, Tilburg University, 5000 LE Tilburg, The Netherlands)

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. This paper was accepted by Uri Gneezy, behavioral economics.

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File URL: http://dx.doi.org/10.1287/mnsc.2013.1711
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Article provided by INFORMS in its journal Management Science.

Volume (Year): 59 (2013)
Issue (Month): 10 (October)
Pages: 2380-2391

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Handle: RePEc:inm:ormnsc:v:59:y:2013:i:10:p:2380-2391
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