Spillover Effects of Loss of Control on Risky Decision-Making

Abstract

Decision making in risky situations is frequently required in our everyday lives and has been shown to be influenced by various factors, some of which are independent of the risk context. Based on previous findings and theories about the central role of perceptions of control and their impact on subsequent settings, spillover effects of subjective loss of control on risky decision-making are assumed. After developing an innovative experimental paradigm for inducing loss of control, its hypothesized effects on risky decision-making are investigated. Partially supporting the hypotheses, results demonstrated no increased levels of risk perceptions but decreased risk-taking behavior following experiences of loss of control. Thus, this study makes a methodological contribution by proposing a newly developed experimental paradigm facilitating further research on the effects of subjective loss of control, and additionally provides partial evidence for the spillover effects of loss of control experiences on risky decision-making.

Competition and subsequent risk-taking behaviour: Heterogeneity across gender and outcomes

“…Our results are instead consistent with the literature on self-serving attributional bias claiming that individuals tend to make attributions for negative outcomes that are more external than for positive ones. Losing the tournament causes a shift in the locus of control that, in turn, induces a more risk averse behaviour (Beisswingert et al, 2016). We observe an heterogeneous effect by gender because the self-serving attributional bias tends to affect males and females differently.…”

“…The self-serving attributional bias posits that individuals tend to make attributions for negative outcomes that are more external than for positive ones. Beisswingert et al (2016) show that a shift in the locus of control from internal to external determines an increase of risk aversion. 17 Hence, losing the tournament may cause more risk-averse choices because of a shift in the locus of control.…”

“…The self-serving attributional bias (Deaux and Farris, 1977) is defined as the tendency of individuals to make attributions for negative outcomes that are more external than for positive ones. Beisswingert et al (2016) indeed show that exogenously shifting the locus of control from internal to external induces a more risk averse behaviour. Hence, subjects may become more risk averse after losing the tournament because of a shift in their locus-of-control.…”

“…Competition is important in a wide range of economic decisions, and this paper contributes to the literature by analysing the consequence of being exposed to competitive 17 Beisswingert et al (2016) propose a computer game in which participants have to predict where an object would be displayed on a circle by recognizing the systematic pattern underlying the previously displayed objects. They show that manipulating the degree of difficulty of the task has an effect in shifting the locus of control, inducing significantly more risk averse choices in the Devil's task (Slovic, 1966), a risk elicitation method that shares many features with the BRET used in our experiment.…”

The Differential Effects of Anger on Trust: A Cross-Cultural Comparison of the Effects of Gender and Social Distance

“…On one hand, we argue that reducing social distance might have lead women to use analytical processing to form their trust. On the other hand, if the anger experience was caused by a close person, the spillover effect of a betrayal feeling might also decrease women’s trust to people with low social distance ( Beisswingert et al, 2016 ). Men’s trust was influenced neither by anger nor by the social distance of the trustee.…”