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Framing and stakes: A survey study of decisions under uncertainty

Manel Baucells () and Cristina Rata
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Cristina Rata: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

No D/568, IESE Research Papers from IESE Business School

Abstract: Using a survey study of 261 decisions under uncertainty, we explore the factors that explain risk taking behavior and those that predict the importance of a decision. We also examine the relationship between framing and status quo, the similarity between monetary and non-monetary decisions, as well as the similarities and differences among our three subject groups (Undergraduates, MBAs and Executives). We find that framing, domain, and probability of success have a strong influence on the probability of taking risks. Other factors, such as group, importance of a decision, and whether the consequences are monetary or not, do not seem to influence risk attitudes. Our analysis of importance of a decision highlights the frequency with which a decision is taken as a key variable. Our results suggest that the cumulative effects of unimportant and frequent decisions are greater than the cumulative effects of very important and infrequent decisions.

Keywords: Decision making under uncertainty; Framing; Importance and frequency of decisions (search for similar items in EconPapers)
Pages: 34 pages
Date: 2004-09-21
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