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Risk, Time Pressure, and Selection Effects

Author

Listed:
  • Kocher, Martin G.

    (University of Vienna, Austria, and Institute for Advanced Studies, Vienna, Austria, and University of Gothenburg, Sweden)

  • Schindler, David

    (Tilburg University, The Netherlands)

  • Trautmann, Stefan T.

    (University of Heidelberg, Germany and Tilburg University, The Netherlands)

  • Xu, Yilong

    (University of Heidelberg, Germany)

Abstract

Time pressure is a central aspect of economic decision making nowadays. It is therefore natural to ask how time pressure affects decisions, and how to detect individual heterogeneity in the ability to successfully cope with time pressure. In the context of risky decisions, we ask whether a person’s performance under time pressure can be predicted by measurable behavior and traits, and whether such measurement itself may be affected by selection issues. We find that the ability to cope with time pressure varies significantly across decision makers, leading to selected subgroups that differ in terms of their observed behaviors and personal traits. Moreover, measures of cognitive ability and intellectual efficiency jointly predict individuals’ decision quality and ability to keep their decision strategy under time pressure.

Suggested Citation

  • Kocher, Martin G. & Schindler, David & Trautmann, Stefan T. & Xu, Yilong, 2018. "Risk, Time Pressure, and Selection Effects," Economics Series 339, Institute for Advanced Studies.
  • Handle: RePEc:ihs:ihsesp:339
    as

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    File URL: http://www.ihs.ac.at/publications/eco/es-339.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Risk; cognitive ability; selection; time pressure;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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