Please use this identifier to cite or link to this item:
https://hdl.handle.net/10356/76641
Title: | Effort provision as a reference point in risk decision-making | Authors: | Leong, Carissa Jun Wei Pang, Hui Xia Tok, Wan Ling |
Keywords: | DRNTU::Social sciences::Psychology | Issue Date: | 2019 | Abstract: | This paper presents evidence on the effect of effort provision on the risk attitude of individuals through the mechanism of reference point. Effort is found to be perceived as part of people’s decision costs and is also capable of shaping their expectations, which are fundamental in the formation of reference points. We hypothesize that greater effort involved would lead to more risk-loving behaviors by raising subjects’ expectations and reference points, thus propelling them to take on more risk to gain a higher reward. In this study, we manipulate the effort level and elicit the effect on individuals’ risk preferences through investment decision-making. The experiment is programmed with the z-Tree software and 186 undergraduates were randomly allocated to four treatment groups which required different effort levels to obtain the same investment amount for the investment decision task. We observe that subjects who have exerted greater effort indeed exhibited a higher risk-taking attitude, which is consistent with our hypothesis. This result illustrates that these decision costs appear to have a significant effect on the behaviors of subjects in monetary investment decision task. | URI: | http://hdl.handle.net/10356/76641 | Schools: | School of Social Sciences | Fulltext Permission: | restricted | Fulltext Availability: | With Fulltext |
Appears in Collections: | SSS Student Reports (FYP/IA/PA/PI) |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
FYP e-copy NTU Library (FINAL) - HE_2AY1819_12.pdf Restricted Access | Main Report | 634.47 kB | Adobe PDF | View/Open |
Page view(s)
391
Updated on Mar 26, 2024
Download(s) 50
85
Updated on Mar 26, 2024
Google ScholarTM
Check
Items in DR-NTU are protected by copyright, with all rights reserved, unless otherwise indicated.