Risk, time pressure, and selection effects

Martin G. Kocher, David Schindler, Stefan T. Trautmann, Yilong Xu

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Time pressure is a central aspect of economic decision making nowadays. It is therefore natural to ask how time pressure affects decisions, and how to detect individual heterogeneity in the ability to successfully cope with time pressure. In the context of risky decisions, we ask whether a person’s performance under time pressure can be predicted by measurable behavior and traits, and whether such measurement itself may be affected by selection issues. We find that the ability to cope with time pressure varies significantly across decision makers, leading to selected subgroups that differ in terms of their observed behaviors and personal traits. Moreover, measures of cognitive ability and intellectual efficiency jointly predict individuals’ decision quality and ability to keep their decision strategy under time pressure.
Original languageEnglish
JournalExperimental Economics
Volume22
Issue number1
Early online dateMay 2018
DOIs
Publication statusPublished - Mar 2019

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Keywords

  • risk
  • cognitive ability
  • selection
  • time pressure

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