Prospect theory or construal level theory? Diminishing sensitivity vs. psychological distance in risky decisions

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Attitudes toward risks are central to organizational decisions. These attitudes are commonly modeled by prospect theory. Construal level theory has been proposed as an alternative theory of risky choice, accounting for psychological distance deriving from temporal, spatial and social aspects of risk that are typical of agency situations. Unnoticed in the literature, the two theories make contradicting predictions. The current study investigates which theory provides a better description of risky decisions in the presence of temporal, spatial, and social factors. We find that the psychophysical effects modeled by prospect theory dominate the psychological distance effects of construal level theory.
Original languageEnglish
Pages (from-to)254-260
JournalActa Psychologica
Volume139
Issue number1
DOIs
Publication statusPublished - 2012

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Psychological Distance
Prospect Theory
Construal
Prediction
Social Aspects
Psychophysical

Cite this

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Prospect theory or construal level theory? Diminishing sensitivity vs. psychological distance in risky decisions. / Trautmann, S.T.; van de Kuilen, G.

In: Acta Psychologica, Vol. 139, No. 1, 2012, p. 254-260.

Research output: Contribution to journalArticleScientificpeer-review

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