Motivating Risky Choices Increases Risk Taking

Ennio Bilancini, Leonardo Boncinelli and Lorenzo Spadoni

No 1/2020, Working Papers CESARE from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: We study the impact of the mode of cognition on risk taking. In an online experiment we ask participants to make a simple decision involving risk. In the control group no manipulation is made, while in the treatment group we exogenously manipulate the mode of cognition by asking subjects to write down a text that motivates their risky choice before any decision is actually made. Such motivation treatment is meant to induce more reflection upon the decision to be made. Our results show an effect of the motivation treatment on risk taking, suggesting that higher reflection makes subjects more prone to risk taking. The effect is stronger if we consider only subjects who imperfectly understand the probability distribution implied by the simple choice task. Based on our experimental findings, we suggest that reflection and comprehension might be substitutes when individuals make decisions involving risk.

Keywords: dual process; risk taking; motivation; deliberation; intuition; bomb risk elicitation task (search for similar items in EconPapers)
JEL-codes: D01 D81 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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