Prospect theory or construal level theory? Diminishing sensitivity vs. psychological distance in risky decisions
Trautmann,S.T. van de Kuilen,G.
Trautmann,S.T.
van de Kuilen,G.
Abstract
Attitudes toward risks are central to organizational decisions. These attitudes are commonly modeled by prospect theory. Construal level theory has been proposed as an alternative theory of risky choice, accounting for psychological distance deriving from temporal, spatial and social aspects of risk that are typical of agency situations. Unnoticed in the literature, the two theories make contradicting predictions. The current study investigates which theory provides a better description of risky decisions in the presence of temporal, spatial, and social factors. We find that the psychophysical effects modeled by prospect theory dominate the psychological distance effects of construal level theory.
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2012
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Research Projects
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Trautmann, S T & van de Kuilen, G 2012, 'Prospect theory or construal level theory? Diminishing sensitivity vs. psychological distance in risky decisions', Acta Psychologica, vol. 139, no. 1, pp. 254-260. https://doi.org/10.1016/j.actpsy.2011.08.006
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info:eu-repo/semantics/restrictedAccess