 Time pressure reverses risk preferencesNajam U. Saqib and Eugene Y. Chan Organizational Behavior and Human Decision Processes, 2015, vol. 130, issue C, 58-68 Abstract: In this research, we offer the hypothesis that time pressure reverses risk preferences. That is, people are typically risk-averse over gains and risk-seeking over losses, as predicted by prospect theory, but we propose that people under time pressure are risk-seeking over gains and risk-averse over losses. This is because people under time pressure perceive the maximal possible outcome – that is, the best possible gain over gains and the worst possible loss over losses – to be more likely to occur, such that they use it as their reference point and not the status quo to evaluate all other outcomes. As such, they perceive intermediary gains relative to the best possible gain as relative losses, which results in risk-seeking, and they perceive intermediary losses relative to the worst possible loss as relative gains, which results in risk-aversion. We conclude by situating our research among prior work generally and with prospect theory specifically. Keywords: Time pressure; Risk preferences; Preference reversal; Prospect theory; Reference point shift (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jobhdp:v:130:y:2015:i:c:p:58-68 DOI: 10.1016/j.obhdp.2015.06.004 Access Statistics for this article Organizational Behavior and Human Decision Processes is currently edited by John M. Schaubroeck More articles in Organizational Behavior and Human Decision Processes from Elsevier |
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