Time pressure reverses risk preferences

Saqib, NU; Chan, EY

Time pressure reverses risk preferences

Saqib, NU Chan, EY

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Publication Type:: Journal Article
Citation:: Organizational Behavior and Human Decision Processes, 2015, 130 pp. 58 - 68
Issue Date:: 2015-09-01

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Field	Value	Language
dc.contributor.author	Saqib, NU	en_US
dc.contributor.author	Chan, EY https://orcid.org/0000-0002-6847-6545	en_US
dc.date.available	2020-05-25T19:07:26Z
dc.date.issued	2015-09-01	en_US
dc.identifier.citation	Organizational Behavior and Human Decision Processes, 2015, 130 pp. 58 - 68	en_US
dc.identifier.issn	0749-5978	en_US
dc.identifier.uri	http://hdl.handle.net/10453/36114
dc.identifier.uri	http://hdl.handle.net/10453/36584
dc.identifier.uri	http://hdl.handle.net/10453/36585
dc.description.abstract	© 2015 Elsevier Inc. In this research, we offer the hypothesis that time pressure reverses risk preferences. That is, people are typically risk-averse over gains and risk-seeking over losses, as predicted by prospect theory, but we propose that people under time pressure are risk-seeking over gains and risk-averse over losses. This is because people under time pressure perceive the maximal possible outcome - that is, the best possible gain over gains and the worst possible loss over losses - to be more likely to occur, such that they use it as their reference point and not the status quo to evaluate all other outcomes. As such, they perceive intermediary gains relative to the best possible gain as relative losses, which results in risk-seeking, and they perceive intermediary losses relative to the worst possible loss as relative gains, which results in risk-aversion. We conclude by situating our research among prior work generally and with prospect theory specifically.	en_US
dc.relation.ispartof	Organizational Behavior and Human Decision Processes	en_US
dc.relation.isbasedon	10.1016/j.obhdp.2015.06.004	en_US
dc.subject.classification	Social Psychology	en_US
dc.title	Time pressure reverses risk preferences	en_US
dc.type	Journal Article
utslib.citation.volume	130	en_US
utslib.for	150201 Finance	en_US
utslib.for	15 Commerce, Management, Tourism and Services	en_US
utslib.for	17 Psychology and Cognitive Sciences	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	open_access
pubs.publication-status	Published	en_US
pubs.volume	130	en_US

Abstract:

© 2015 Elsevier Inc. In this research, we offer the hypothesis that time pressure reverses risk preferences. That is, people are typically risk-averse over gains and risk-seeking over losses, as predicted by prospect theory, but we propose that people under time pressure are risk-seeking over gains and risk-averse over losses. This is because people under time pressure perceive the maximal possible outcome - that is, the best possible gain over gains and the worst possible loss over losses - to be more likely to occur, such that they use it as their reference point and not the status quo to evaluate all other outcomes. As such, they perceive intermediary gains relative to the best possible gain as relative losses, which results in risk-seeking, and they perceive intermediary losses relative to the worst possible loss as relative gains, which results in risk-aversion. We conclude by situating our research among prior work generally and with prospect theory specifically.

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http://hdl.handle.net/10453/36114