Third-party decision-making under risk as a function of prior gains and losses
Humans typically prefer risky options after incurring a financial loss, while generally preferring safer options after a monetary gain. Oftentimes we do not only make decisions for ourselves but also on behalf of others. In the present study we examine how decision-making on behalf of another person can alter risk preference for mixed gambles with moderate probabilities, as a function of prior monetary gains and losses. Furthermore, we test how the extent of accountability for choices and outcome further may impact these effects. To test this, participants performed a series of trials in which they could either gain or lose money depending on a separate, unrelated, task. Immediately following the respective gain or loss, they decided to either play or pass on a mixed gamble that could either double or eliminate their gain or loss. Importantly, participants decided either (1) for themselves, or (2) on behalf of another participant under outcome accountability, or (3) under full accountability (process and outcome). Results revealed increased risk-taking after incurring a loss as compared to a gain for both Self and Other choices. However, this effect was significantly smaller for choices on behalf of others, in particular when accountability was reduced. The reduced impact of gains and losses on risk behavior on behalf of others are discussed in terms of reduced saliency and subjective value for prior gain/loss contexts, and consequently reduced engagement of affective processes.
|Accountability, Gain, Loss, Risk-taking, Self-other decision-making, Third-party|
|Journal of Economic Psychology|
|Organisation||Rotterdam School of Management (RSM), Erasmus University|
Losecaat Vermeer, A.B. (Annabel B.), Boksem, M.A.S, & Sanfey, A.G. (2019). Third-party decision-making under risk as a function of prior gains and losses. Journal of Economic Psychology. doi:10.1016/j.joep.2019.102206