Good Thinking or Gut Feeling? Cognitive Reflection and Intuition in Traders, Bankers and Financial Non-Experts

Volker Thoma, Elliott White, Asha Panigrahi, Vanessa Strowger and Irina Anderson

PLOS ONE, 2015, vol. 10, issue 4, 1-17

Abstract: The current study investigated differences in decision-making style and risk-taking between financial traders, non-trading bank employees, and people not working in finance. Traders scored significantly higher than participants in the other two groups on the cognitive reflection test (CRT) which measures the tendency to inhibit automatic but frequently false responses in reasoning tasks. Scores for traders compared to people outside the banking sector were also higher on a self-rated scale for reflective thinking in decision-making, but there were no differences in self-rated intuitive thinking between groups. Financial risk-taking correlated with cognitive reflection scores and was significantly lower in the non-expert group compared to the other groups working in financial services. Traders in the current study showed no elevated preference to use ‘intuition’ in their decision-making compared to other groups. Overall, these results indicate that compared to non-expert participants financial traders have a higher self-rated tendency for reflective thinking and a greater propensity to inhibit the use of mental shortcuts (heuristics) in decision-making.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0123202 (text/html)
https://journals.plos.org/plosone/article/file?id= ... 23202&type=printable (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0123202

DOI: 10.1371/journal.pone.0123202

Access Statistics for this article

More articles in PLOS ONE from Public Library of Science
Bibliographic data for series maintained by plosone ().