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Probability weighting under time pressure: applying the double-response method

Katarzyna Gawryluk () and Michal Krawczyk ()
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Katarzyna Gawryluk: Centre for Economic Psychology and Decision Sciences Koźmiński University

No 2017-08, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: We conduct a laboratory experiment to investigate the impact of deliberation time on behavior under risk and uncertainty. Towards this end we let our participant make quick, intuitive evaluations of a number of lotteries and modify them, should they wish to do so, after deliberation. Both certainty equivalents are incentivized (a double-response method). The main finding is that additional deliberation time reduces pessimism, especially in the case of lotteries involving unknown probabilities.

Keywords: probability weighting; prospect theory; time pressure (search for similar items in EconPapers)
JEL-codes: D81 C91 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2017
New Economics Papers: this item is included in nep-cbe and nep-exp
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