Decision-Making Traits and States as Determinants of Risky Choices

Manja Gärtner, Gustav Tinghög and Daniel Västfjäll
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Manja Gärtner: DIW Berlin
Daniel Västfjäll: Linköping University

No 195, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: We test the effects of dual processing differences in both individual traits and decision states on risk taking. In an experiment with a large representative sample (N = 1,832), we vary whether risky choices are induced to be based on either emotion or reason, while simultaneously measuring individual decision-making traits. Our results show that decision-making traits are strong and robust determinants of risk taking: a more intuitive trait is associated with more risk taking, while a more deliberative trait is associated with less risk taking. Experimentally induced states, on the other hand, have no effect on risk taking. A test of state-trait interactions shows that the association between an intuitive trait and risk taking becomes weaker in the emotion-inducing state and in the loss domain. In contrast, the association between a deliberative trait and risk taking is stable across states. These findings highlight the importance of considering state-trait interactions when using dual processing theories to predict individual differences in risk taking.

Keywords: risk preferences; intuition; emotion; reason; experiment (search for similar items in EconPapers)
JEL-codes: C91 D81 D91 (search for similar items in EconPapers)
Date: 2019-10-23
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-rmg
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