Keep your budget together! Investigating determinants on risky decision-making about losses

Abstract

The present study investigates the influence of framing, different amounts to lose, and probabilities of a risky and sure choice option, time limits, and need on risky decision-making. For a given block of trials, participants were equipped with a personal budget (number of points). On each trial within a block, a specific initial amount is possibly taken from the budget by the outcome of a gamble or the choice of a sure loss option. The goal was to avoid losing points from the budget for not falling below a predefined need threshold. Three different levels of induced need were included. Employing a psychophysical experimental approach, we furthermore tested a sequential component of human risk behavior towards a need threshold inspired by research on animal foraging behavior. Risk-sensitivity models and the Stone-Geary framework serve as generating hypotheses on need thresholds. We found that framing, need, and probabilities influenced risky choices. Time limits and initial amounts moderated the framing effect. No sequential component was observed.

Individual differences moderate effects in an Unusual Disease paradigm: A psychophysical data collection lab approach and an online experiment

“…Once again, the psychophysical data collection approach has been shown to be an excellent method for measuring framing effects (see also, e.g., Guo et al, 2017 ; Diederich et al, 2020 ; Roberts et al, 2021 ; Wyszynski and Diederich, 2022 ). In addition to framing, we found other effects influencing the proportion of choosing the gamble.…”

“…It is also possible that other effects not considered in the current studies, as well as further interaction effects (e.g., 3-way-interactions), influence choice behavior. For instance, we know from previous studies that short time limits for making the risky choice enhance the framing effect (e.g., Guo et al, 2017 ; Diederich et al, 2018 , 2020 ; Wyszynski and Diederich, 2022 ). In the current study, the effect of time limits was not moderated by scores of the psychometric instruments (see experiment 1), but it is well possible that individual cognitive-styles and risk-styles influence the relationship between time and framing or other interactions.…”

“…Framing effects mainly emerge in the fast and intuitive System 1, and they tend to disappear when the slow and deliberative System 2 is engaged (see e.g., Sloman, 1996 ; Kahneman and Frederick, 2002 , 2005 ). Empirical findings support these hypotheses: stronger framing effects are observed when participants are put under time pressure (Guo et al, 2017 ; Diederich et al, 2018 , 2020 ; Wyszynski et al, 2020 ; Roberts et al, 2021 ; Wyszynski and Diederich, 2022 ), and weaker framing effects occur when people are forced to use deliberative reasoning (Miller and Fagley, 1991 ; Takemura, 1994 ; Sieck and Yates, 1997 ; Almashat et al, 2008 ).…”

“…That is, instead of presenting few trials to many participants as in a typical social science approach, here fewer participants perform many more trials. This method had successfully been used in other framing studies (Guo et al, 2017 ; Diederich et al, 2020 ; Roberts et al, 2021 ; Wyszynski and Diederich, 2022 ). Second, we include two different interpretations of the framing effect: a narrow interpretation, i.e., comparing the number of frame-inconsistent choices between participants; and a wide one, i.e., comparing the proportions of risky choices made by the participants in the two frames.…”

Give what is required and take only what you need! The effect of framing on rule-breaking in social dilemmas

“…Recent research has shown that a need defined similarly as in the current study can serve as a reference point in various decision-making scenarios. Thus, need has been shown to influence decisions as well as charitable donations and to moderate framing effects (e.g., Bauer, 2019;Bauer et al, 2022;Diederich et al, 2020;Weiß et al, 2017;Wyszynski et al, 2020;Wyszynski & Diederich, 2022).…”