The attractiveness of gambles and the unwillingness to defer time
DOI:
https://doi.org/10.14659/PJOEP.2014.05.04Keywords:
delayed gambles, skewness of gambles, magnitude effectAbstract
Research by Lovallo and Kahneman (2000) showed that gambles rated as more attractive have agreater tolerance for delay. The present study shows the results of amodified test that extended this conclusion togames with new features. Gambles were presented with apositive expected value where no win is possible and gambles with anegative expected value where no loss is possible. Respondents (N = 232) were more risk averse than in the Lovallo and Kahneman study, although they were also more willing todelay attractive gambles. The modified test also indicates that when people assume aconstant positive expected value, they prefer the gamble with asmall prize of high probability than alarge prize of low probability. Similarly, when people assume aconstant negative expected value, they have more aversion toasmall loss of high probability than alarge loss of low probability.
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