People’s Financial Choice Depends on their Previous Task Success or Failure

Sekścińska, Katarzyna

doi:10.3389/fpsyg.2015.01730

Cited by 13 publications

(14 citation statements)

References 51 publications

(72 reference statements)

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“…We believe that decreased propensity to take financial risk in the non-financial victim condition is in line with other studies showing that individuals who watched a sad movie clip 6 We base this assumptions on the results of our previous pilot studies (Sekscinska 2015) showing that for Poles quotas equal PLN 500 (approximately $130)and above are perceived to be meaningful. Fig.…”

Section: Discussionsupporting

confidence: 76%

“…One of possible explanations might be the amount of money the participants decided about. While in the present studies risky choices concerned amounts of money pretested to be meaningful (Sekscinska 2015), in the studies conducted so far, risky choices involved very small quotas. In a study of Mishra et al (2015) participants performed a Choice Task, in which they decided between CAD$3 for sure and a risky option that ranged from 80% probability of receiving CAD$3.75 to 10% probability of receiving CAD$30 (which in 2015 was an equivalent of approximately $21).…”

Section: Discussionmentioning

confidence: 81%

“…Such relatively small amounts of money were probably not perceived as meaningful by the participants. 6 (Sekscinska 2015). Consequently, they were more likely to put them at risk.…”

Section: Discussionmentioning

confidence: 99%

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That’s not fair! unfair treatment spills over into individual risky financial decisions

Sekścińska

Rudzińska-Wojciechowska

2019

Curr Psychol

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Studies indicate that experiencing unfairness may influence subsequent decisions. There is initial evidence that this is also true for gambling decisions made after an experience of unfair treatment in a financial domain. The presented studies test whether this can be extended to other domains of financial risk-taking, such as investments. Moreover, we aim to investigate whether the effects of such experience in one domain generalize to other domains. Three experimental studies were conducted to investigate how unfair treatment coming from varied domains affects individuals' propensities to make risky investment and gambling choices in subsequent tasks. The experience of being a victim or a beneficiary of unfair treatment in financial and non-financial domains was induced and the propensity to take investment and gambling risks was measured. The results of the experiments indicated that the experience of unfairness influences the propensity to make risky financial choices but the domain in which it is experienced plays an important role. Being a victim of financial unfairness makes people more prone to take investment risk and build riskier investing portfolios with more stocks and fewer bonds than when they are beneficiaries or when they are treated fairly. Moreover, being the beneficiary of unfair treatment in a financial domain makes people less prone to choose a sure option (vs risky) in lottery tasks. The abovementioned relationships are exactly the opposite when the experience of (un)fairness comes from a task in a non-financial context. Specifically, the experience of unfair treatment in a non-financial domain leads people to be less prone to make risky investment choices, and it enhances the propensity to build safer investment portfolios with more bonds and fewer stocks than people from the unfair-beneficiary and fair groups. Furthermore, being the beneficiary of unfair treatment in a non-financial context makes people more prone to choose sure option in lottery task.

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Section: Discussionsupporting

confidence: 76%

Section: Discussionmentioning

confidence: 81%

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That’s not fair! unfair treatment spills over into individual risky financial decisions

Sekścińska

Rudzińska-Wojciechowska

2019

Curr Psychol

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“…They focused on different decision domains like the financial, social, or health domains. The findings showed that, contrary to classical decision theories, risky decisions are affected by various factors like framing (e.g., Tversky and Kahneman, 1981), the source of the probability information (Hertwig et al, 2004), any previous experience (e.g., Sekścińska, 2015a), the decision maker's individual traits (e.g., Campbell et al, 2004), or even the activation of a different social role (Sekścińska et al, 2016). This signifies that decisions made in different domains (even when they are made concurrently) should not be described by the same and stable utility function.…”

Section: Introductionmentioning

confidence: 82%

“…Both RFQ scales exhibited good internal reliability (α = 0.73 for the Promotion scale; α = 0.080 for the Prevention scale; Higgins et al, 2001). The propensity to make financial choices was measured with one question tool in which the participants were asked to select one category of financial activity (consuming, saving, or investing) on which they would spend a hypothetical PLN 10,000 (as used in previous studies—Sekścińska, 2015a; Sekścińska et al, 2016). The tool also included information on the meaning of consuming, saving, and investing in the context of the study: consuming in the sense of spending money on products or services; saving meaning keeping the money in a nonprofitable (or almost nonprofitable) form without any risk of loss, for instance, a deposit in a noninterest-bearing bank account.…”

Section: Methodsmentioning

confidence: 99%

How People's Motivational System and Situational Motivation Influence Their Risky Financial Choices

2016

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People's preferences for risks have been a subject of interest to researchers in both the economy and psychology fields over the last few years. This has given rise to many important findings about the role of psychological factors that influence people's choices. The presented studies focused on the role of motivational systems (described by Higgins in the Regulatory Focus Theory) in explaining people's financial choices. The main goal was to examine the relationship between people's chronic promotion and prevention motivational system and their propensity to (1) invest, (2) undertake investment risks, and (3) assume financial risks in gambling tasks in both the gain and loss decision-making frame. Moreover, we aimed to investigate how chronic motivational systems confronted with situationally induced promotion and prevention motivation would affect people's propensity to invest and embrace financial risks. Two CAWI studies on a Polish national representative sample (N1 = 1093; N2 = 1096) were conducted. The second study consisted of two waves with a 2-week break. The studies provided evidence of higher chronic promotion motivation as well as higher prevention motivation associated with the propensity to invest; however, induced promotion motivation results in a lower propensity to invest compared to induced prevention motivation. Participants with an activated promotion system built more risky portfolios than individuals with an induced prevention system. Moreover, participants with a low chronic promotion system built more risky portfolios than individuals with a high promotion motivation system as long as their prevention system was also low. In terms of gambling decisions in both the gain and loss frame, a higher level of chronic promotion motivation and situationally induced promotion motivation were related to the preference for the non-sure option over the sure one.

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Self‐control and investment choices

Sekścińska

Rudzińska-Wojciechowska

Jaworska

2021

Behavioral Decision Making

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Three studies (N 1 = 799, N 2 = 359, and N 3 = 310) investigating the role of selfcontrol in investment decisions are reported. Study 1 focused on links between trait self-control, the propensity to invest, and the propensity to make risky investment decisions. Study 2 investigated whether reflecting on one's prior successes and failures in exercising self-control has an impact on subsequent investment decisions. Study 3 considered the joint effect of both self-control factors considered in the first two studies. The results indicated that self-control plays a significant role in explaining investment decisions. Specifically, self-control level was positively related to the propensity to invest but negatively related to the propensity to take investment risks. Paralleling these findings, participants reflecting on situations in which they resisted temptation allocated more money to investments than control group members but were less willing to make risky decisions when creating investment portfolios. Finally, an interplay was observed between trait self-control and factors modifying the situational level of this variable: Among participants recalling successes in self-control, higher levels of trait self-control were linked to investment decisions, but this was untrue for participants reflecting on failures in self-control.

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People’s Financial Choice Depends on their Previous Task Success or Failure

Cited by 13 publications

References 51 publications

That’s not fair! unfair treatment spills over into individual risky financial decisions

That’s not fair! unfair treatment spills over into individual risky financial decisions

How People's Motivational System and Situational Motivation Influence Their Risky Financial Choices

Self‐control and investment choices

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