Tempus Fugit: Time Pressure in Risky Decisions

We study the effects of time pressure on risky decisions for pure gain prospects, pure loss prospects, and mixed prospects involving both gains and losses. In two experiments we find that time pressure has no effect on risk attitudes for gains, but increases risk aversion for losses. For mixed prospects, subjects become simultaneously more loss averse and more gain seeking under time pressure, depending on the framing of the prospects. The results suggest the importance of aspiration levels, and thus the overall probability to break even, under time pressure. We discuss the implications of our findings for decision-making situations that involve time pressure.