The effect of presentation on financial decision-making under risk
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2025-07-08
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en
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This thesis investigates whether the presentation of a decision list can affect financial decision-making under risk. The results of a between-subject experiment, based on the task developed by Holt and Laury (2002), show that individuals’ decision-making was more risk-averse in riskier decision problems when these were presented in isolation, compared to when they were shown alongside safer and intermediate-risk decision problems. These findings support the theory that individuals may show bounded rationality when the presentation of a decisions list changes, because their choices do not always remain consistent.
The study mentioned perceived task complexity as a possible explanation for the observed difference in decision-making, but the underlying cognitive mechanisms remain unclear. The study contributes to the existing literature on bounded rationality and the effect of presentation on decision-making under risk. Practically, the findings suggest that if the goal is to nudge people to choose safer options (to behave more risk averse) in riskier decision problems, financial organisations should consider presenting these riskier decision problems in isolation without simultaneously including safer and intermediate-risk decision problems. Understanding how presentation affects financial decision-making is therefore important for policymakers and financial organisations when designing financial products and policies.
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Faculteit der Managementwetenschappen