When imagining future wealth influences risky decision making
Journal Title: Judgment and Decision Making - Year 2013, Vol 8, Issue 3
Abstract
The body of literature on the relationship between risk aversion and wealth is extensive. However, little attention has been given to examining how future realizations of wealth might affect (current) risk decisions. Using paired lottery choice experiments and exposing subjects experimentally to imagined future wealth frames, I find that individuals are more risk-seeking if they are asked to imagine that they will be wealthy in the future. Yet I find that individuals are not significantly more risk-averse if they are asked to imagine that they will be poor in the future. I discuss theoretical and policy implications of these findings, including why savings rates are so low in the United States.
Authors and Affiliations
Adam Eric Greenberg
Keywords
Related Articles
- EP ID EP678058
- DOI -
- Views 113
- Downloads 0
Memory retrieval processes help explain the incumbency advantage
Voters prefer political candidates who are currently in office (incumbents) over new candidates (challengers). Using the premise of query theory (Johnson, Häubl & Keinan, 2007), we clarify the underlying cognitive mechan...
Precise models deserve precise measures: A methodological dissection
The recognition heuristic (RH) — which predicts non-compensatory reliance on recognition in comparative judgments — has attracted much research and some disagreement, at times. Most studies have dealt with whether or und...
Short-sighted greed? Focusing on the future promotes reputation-based generosity
Long-term thinking and voluntary resource sharing are two distinctive traits of human nature. Across three experiments (N=1,082), I propose a causal connection: Sometimes people are generous because they think about the...
Cross-national in-group favoritism in prosocial behavior: Evidence from Latin and North America
As individuals from different nations increasingly interact with each other, research on national in-group favoritism becomes particularly vital. In a cross-national, large-scale study (N = 915) including representative...
Testing the ability of the surprisingly popular method to predict NFL games
We consider the recently-developed “surprisingly popular” method for aggregating decisions across a group of people (Prelec, Seung and McCoy, 2017). The method has shown impressive performance in a range of decision-maki...