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Decision-Making Traits and States as Determinants of Risky Choices

Author

Listed:
  • Gärtner, Manja

    (DIW Berlin)

  • Tinghög, Gustav

    (Linköping University)

  • Västfjäll, Daniel

    (Linköping University)

Abstract

We test the effects of dual processing differences in both individual traits and decision states on risk taking. In an experiment with a large representative sample (N = 1,832), we vary whether risky choices are induced to be based on either emotion or reason, while simultaneously measuring individual decision-making traits. Our results show that decision-making traits are strong and robust determinants of risk taking: a more intuitive trait is associated with more risk taking, while a more deliberative trait is associated with less risk taking. Experimentally induced states, on the other hand, have no effect on risk taking. A test of state-trait interactions shows that the association between an intuitive trait and risk taking becomes weaker in the emotion-inducing state and in the loss domain. In contrast, the association between a deliberative trait and risk taking is stable across states. These findings highlight the importance of considering state-trait interactions when using dual processing theories to predict individual differences in risk taking.

Suggested Citation

  • Gärtner, Manja & Tinghög, Gustav & Västfjäll, Daniel, 2019. "Decision-Making Traits and States as Determinants of Risky Choices," Rationality and Competition Discussion Paper Series 195, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:195
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    More about this item

    Keywords

    risk preferences; intuition; emotion; reason; experiment;
    All these keywords.

    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
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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