Time is money - Time pressure, incentives, and the quality of decision-making

Martin Kocher and Matthias Sutter

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: Many decisions in economics and finance have to be made under severe time pressure. Furthermore, payoffs frequently depend on the speed of decision-making, as, for instance, when buying and selling stocks. In this paper, we examine the influence of time pressure and time-dependent incentive schemes on the quality of decision-making in an experimental beauty-contest game. We find that convergence to equilibrium is faster and payoffs are higher under low time pressure than under high time pressure. Interestingly, time-dependent payoffs under high time pressure lead to significantly quicker decision-making without reducing the quality of decisions.

JEL-codes: C72 C91 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (96)

Published in Journal of Economic Behavior and Organization 3 61(2006): pp. 375-392

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Related works:
Journal Article: Time is money--Time pressure, incentives, and the quality of decision-making (2006)
Working Paper: Time is money - Time pressure, incentives, and the quality of decision-making (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:18184

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