Of two minds: An experiment on how time scarcity shapes risk-taking behavior

Sergio Almeida and Mauro Rodrigues

No 2021_18, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: Several studies report that the brain evaluates prospects and executes decisions as the outcome of two mental processing types: one described as slow and reflective and the other as fast and intuitive. We investigate how these two mental processes affect risk-taking behavior by using time pressure to establish an intuitive response. We observe that time constraints do not change risk attitudes. Furthermore, it is only when subjects are given ample time to decide and instructed to reflect that they show the well-documented shift of risk preferences across the domain of losses and gains.

Keywords: Risk-taking; time scarcity; dual-process cognition; fast-thinking; gain-loss framing (search for similar items in EconPapers)
JEL-codes: C91 D81 D90 D91 (search for similar items in EconPapers)
Date: 2021-07-01
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-neu, nep-ore and nep-upt
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