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Need, frames, and time constraints in risky decision-making

Author

Listed:
  • Adele Diederich

    (Jacobs University Bremen)

  • Marc Wyszynski

    (Jacobs University Bremen)

  • Stefan Traub

    (Helmut-Schmidt-University)

Abstract

In two experiments, participants had to choose between a sure and a risky option. The sure option was presented either in a gain or a loss frame. Need was defined as a minimum score the participants had to reach. Moreover, choices were made under two different time constraints and with three different levels of induced need to be reached within a fixed number of trials. The two experiments differed with respect to the specific amounts to win and the need levels. The $$2 \times 2 \times 3$$2×2×3 design was a within-subject design. Data were evaluated on an overall and on a group level, the latter based on participants’ stated risk preference and on revealed preferences (choice proportions) using cluster analysis across subjects. Overall, the results showed riskier behavior when the choice options were presented as losses as compared to gains (framing effect) and when the induced need was highest. Time limits enhanced the framing effect.

Suggested Citation

  • Adele Diederich & Marc Wyszynski & Stefan Traub, 2020. "Need, frames, and time constraints in risky decision-making," Theory and Decision, Springer, vol. 89(1), pages 1-37, July.
    • Handle: RePEc:kap:theord:v:89:y:2020:i:1:d:10.1007_s11238-020-09744-6
    DOI: 10.1007/s11238-020-09744-6
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    References listed on IDEAS

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    Cited by:

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    2. Sergio Almeida & Mauro Rodrigues, 2021. "Of two minds: An experiment on how time scarcity shapes risk-taking behavior," Working Papers, Department of Economics 2021_18, University of São Paulo (FEA-USP).

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