What if versus probabilistic scenarios: a neuroscientific analysis

Rosella Castellano, Marco Mancinelli, Giorgia Ponsi () and Gaetano Tieri
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Marco Mancinelli: Sapienza University of Rome
Giorgia Ponsi: Sapienza University of Rome
Gaetano Tieri: University of Rome Unitelma-Sapienza

Annals of Operations Research, 2021, vol. 299, issue 1, No 16, 347 pages

Abstract: Abstract Nowadays financial products are extremely complex and the decision to choose among them could represent a stressful event for individuals. Information related to the risk/return profile of an investment instrument and the way it is represented (framing effect) are crucial in determining the outcome of individuals’ decisions. In this paper we consider two schemes that can be employed to represent the random performances of risky financial products, namely the what if and probabilistic scenarios frames. This paper aims at measuring the impact of the two above mentioned schemes on investors’ decision accuracy and peripheral nervous system activity. In particular, the goal is twofold: (1) to investigate the behavioural and physiological indexes elicited in the decision-making process of investors who have to choose on the basis of the two different schemes; (2) to investigate on the effect of time pressure when probabilistic scenarios or what if frames are used. The first point is investigated by means of a decision making task, while the second one by means of a perceptual one.

Keywords: Decision making; Probabilistic scenarios; What if; Framing effect (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10479-019-03272-5

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