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We systematically explore decision situations in which a decision maker bears responsibility for somebody else's outcomes as well as for her own in situations of payoff equality. In the gain domain we confirm the intuition that being responsible for somebody else's payoffs increases risk aversion. This is however not attributable to a 'cautious shi...
Citations
... Then the question arises to what extent the decision maker considers his 1 client's risk preferences. Both his responsibility and whether and how he is held accountable for his decisions and their outcomes by his client will affect his actions (Batteux et al., 2019;Bolton et al., 2015;Pahlke et al., 2015). This study focuses on different types and degrees of accountability (Lerner & Tetlock, 1999;Tetlock, 1985) to reach a better understanding of interpersonal risk-taking. ...
... This study integrates and complements both research on interpersonal risk-taking (e.g., Pahlke et al., 2012Pahlke et al., , 2015Batteux et al., 2019Batteux et al., , 2020Polman & Wu, 2020) and on outcome bias in subjective evaluations of risk-taking decisions (e.g., Baron & Hershey, 1988;Gurdal et al., 2013;König-Kersting et al., 2021). With respect to clients' evaluations, results of Experiments 1 and 2 show that while evaluations are sensitive to both decisions and outcomes in a situation where they represent mere feedback, they are more strongly biased towards outcomes and reflect almost no decision accountability when they have monetary consequences for decisions makers. ...
In a sequence of experiments, this study investigates how people evaluate others who make risky decisions on their behalf, and how such evaluations affect delegated risk-taking. A decision maker acts on behalf of a client who holds the decision maker accountable by way of a subjective evaluation after observing a risky decision’s outcome. If evaluation is biased towards the outcome, it may have dysfunctional effects with respect to delegated risk-taking in that decision makers’ risk choices are increasingly misaligned with their clients’ risk preferences. We find evidence giving support to this conjecture. Across and within three experiments, we test for the effects of different types and degrees of accountability in that we manipulate the information available to clients as well as the consequences which evaluations have for decision makers. Evaluations are biased towards outcomes in all experiments. When evaluations affect decision maker’s compensations, a stronger outcome bias in evaluations translates into risk-taking decisions being less frequently aligned with clients’ risk preferences. In the same situation, giving clients the opportunity to make peer comparisons increases outcome bias. We further find that clients do not hold decision makers accountable for their risk choices when they cannot observe the risk-taking decision, but have to infer it from observing the outcome. Theoretical and practical implications of the results are discussed.
... Although most previous evidence suggests that choice is perceived as positive (e.g., Bown et al., 2003), there are studies that point toward the difference of having choices and making choices, with making choices being far more controversial Ogden et al., 2008), potentially because they inherently encompass the possibility of making the wrong choice. Moreover, if decisions affect not only oneself but also another person, such considerations might be even more pronounced, as social responsibility has been reported to effect decision-making behavior, especially under risk (Pahlke et al., 2015). Interestingly, in more competitive situations, participants seem to tend to more selfish rather than prosocial behavior when placed in a position of more power hinting that the benign general atmosphere of the present experiments might play a role in the participants' responses (Le Bars et al., 2022). ...
... For example, social responsibility may be more pronounced for negative outcomes than for neutral (or even for positive) outcomes, because own failure extends to the coagent and thus weighs more heavily than in single-agent scenarios. This is in line with findings that agents alter their risk-taking behavior when having responsibility for a coagent's wins or losses (Pahlke et al., 2015). That is, while it is possible that positive outcome is associated with more sense of agency in accordance with self-serving bias (e.g., Miller & Ross, 1975), control also comes with more responsibility, especially in situation in which agents are responsible not only for themselves but also for others. ...
... These findings expand previous discussions on control and positive affect (e.g., Bown et al., 2003;Leotti & Delgado, 2011;Leotti et al., 2010;Lorenz et al., 2015), pointing toward differences between having choices and making choices and to the difference between acting alone and acting together in equal or unequal relationships (e.g., Pacherie, 2014;Pahlke et al., 2015). ...
Distributing complex actions across agents is commonplace in human society. The objective efficiency of joint actions comes with critical challenges for the sense of agency of individual agents, complicating an accurate formation of these agents’ perceived control over actions and action outcomes. Here we report a new experimental paradigm to investigate sense of agency for supervisors and subordinates in hierarchical settings. Results indicate profound differences in the sense of agency between both roles, while also indicating additional contributions of such situational factors as degrees of freedom, action decision versus action execution, outcome valence, and veto options. We further observed a tight coupling of sense of agency and sense of responsibility, with only weak links to affective responses to the action outcome.
... Many research studies have been conducted on decision-making in various fields, including business, economics, nursing, and medicine (Bahrami et al., 2017;Johansen & O'brien, 2016;Lu et al., 2012;Nelson et al., 2022;O'neill et al., 2015;Pahlke et al., 2015;Super et al., 2018;Thakkar et al., 2022;Zheng et al., 2021). Decision-making involves choosing the most suitable option or course of action based on specific criteria or strategies, as explained by (Wang & Ruhe, 2007). ...
... Research on decision-making in healthcare organisations has highlighted the critical role of information sharing in ensuring that decisions are made based on all available and relevant information (O'neill et al., 2015). Effective information sharing helps reduce ambiguity and uncertainty in decision-making by providing decision-makers with a more complete picture of the situation (Pahlke et al., 2015). This is particularly important in healthcare, where decisions can significantly affect patient health and safety. ...
... Overall, our findings show that participants' characteristics do not predict the discussion of shared information to contribute to decision-making quality-as well as provide additional insights into group processes, this result is consistent with (Henningsen et al., 2004). However, according to a number of research studies (Anderson & Galinsky, 2006;Andersson et al., 2016;Brooks et al., 2019;Eriksen et al., 2020;Ertac et al., n.d.undefinedFüllbrunn & Luhan, 2017;Jianakoplos & Bernasek, 2008;Montinari & Rancan, 2018;Pahlke et al., 2012Pahlke et al., , 2015, individuals' demographic characteristics have a significant impact on their risk-taking behaviour and decision-making power. ...
This paper examines how information sharing impacts the quality of decision-making in Jordanian private hospitals from the point of view of employees. It involved a structured questionnaire, which consisted of demographic data, information sharing, and decision-making. The research results suggest that sharing information in both common and unique situations significantly positively influences the decision-making abilities of teams. Merely possessing unique information does not enhance the ability to make decisions; conversely, common information is crucial to facilitate the decision-making process. Participant characteristics have no effect on decision-making quality, especially as team functional diversity continues to rise, with information sharing even less relevant as a result. Our results indicate that participants’ characteristics do not predict whether the discussion of shared information will contribute to decision-making quality. As a practical contribution, our findings recognise the importance of decision teams in information management, encourage flexibility and openness in organisational relations, and assist policymakers, managers, and regulators through training programs that confirm participation is one of the most important components of generating new ideas.
... which may lead to such gaps in competitive environments. Most research shows that women have a higher risk aversion than men [11,33,35,39,[50][51][52][53][54][55][56][57][58], but this effect is moderated by culture [17,18,54,57,59]. Women in single-gender contexts are more likely to prefer risky options, indicating that risk preferences are socially learned [60,61]. ...
This research paper examines the extent to which high-stakes competitive tests affect gender gaps in standardized tests of Mathematics and Language. To this end, we estimate models that predict students' results in two national standardized tests: a test that does not affect students' educational trajectory, and a second test that determines access to the most selective universities in Chile. We used data from different gender twins who took these tests. This strategy allows us to control, through household fixed effects, the observed and unobserved household characteristics. Our results show that competitive tests negatively affect women. In Mathematics, according to both tests, there is a gender gap in favor of men, which increases in the university entrance exam, especially for high-performance students. As the literature review shows, women are negatively stereotyped in Mathematics, so this stereotype threat could penalize high-achieving women, that is, those that go against the stereotype. In Language tests, women outperform men in the standardized test taken in high school, but the situation is reversed in the university entrance exam. From our analysis of Chilean national data, we find no evidence that the gender effect observed in the competitive test depends on the students' achievement level. Following the literature, this gender gap may be linked to women's risk aversion, lower self-confidence, lower preference for competition, as well as the effect of answering a test under time pressure.
... Moreover, it was shown that having choices (i.e., control) is much more important for individuals than making choices because each choice includes the possibility of a wrong decision and an increased responsibility for the outcome (Ogden et al., 2008). This might be especially true when, as in our setup, behavior does not only affect oneself but also others (Pahlke et al., 2015). Finally, even though the observed positive correlation of control and pleasantness ratings suggests that perceived control has a positive affective component (see also Bown et al., 2003), this is not a mandatory requirement of a behaviorally relevant reward. ...
Voluntary actions are accompanied by a sense of control over this action and its effects. Forming an appropriate sense of control (or sense of agency) has widespread consequences of individual and societal relevance. Moreover, perceived control might serve as a powerful action motivator, although this critical function has been addressed scarcely so far. Thus, in two experiments (N = 101 adults for each study), we directly examined the value of control for human agents by allowing participants to choose between financial gain and situational control. Crucially, a significant share of participants chose to be in control even when this option was less financially rewarding. That is, participants had to be offered 66% (Study 1) and 34% (Study 2) of expected asset earnings as an additional reward to make them predictably waive control. In addition to the value of objective decision rights, we also measured subjectively perceived control. This is a further extension of prior research as similar levels of objective control can lead to substantially different subjective feelings of control. Hereby, we found a share of the participants to create an illusionary sense of agency in situations of little objective control. These results portray perceived control as a powerful motivator for human behavior that comes with a unique and quantifiable value for individual agents.
... A modulation by choosing for someone else, whatever its direction, has been also investigated for risk attitude but again with mixed results. Some studies have found no difference in risk preference when deciding for someone else versus oneself (Barrafrem and Hausfeld 2020) or both (Andersson et al. 2016), while others have reported either decreased risk-taking (Pahlke et al. 2015;Eriksen et al. 2020) or increased risk-taking and less patience (Vlaev et al. 2017) when choosing for others. Such inconsistencies ref lect not only considerable individual differences across participants (Charness and Jackson 2009;Füllbrunn and Luhan 2015) but also varying behavior within the same individuals (Eriksen et al. 2020) when choosing for another. ...
Despite the ubiquitous interdependence between one's own decisions and others' welfare, and the controversial evidence on the behavioral effect of choosing for others, the neural bases of making decisions for another versus oneself remain unexplored. We investigated whether loss aversion (LA; the tendency to avoid losses over approaching equivalent gains) is modulated by (i) choosing for oneself, other individuals, or both; (ii) knowing or not knowing the other recipients; or (iii) an interaction between these factors. We used fMRI to assess the brain activations associated with choosing whether to accept or reject mixed gambles, either for oneself, for another player, or both, in 2 groups of 28 participants who had or had not briefly interacted with the other players before scanning. Participants displayed higher LA for choices involving their payoff compared with those affecting only the payoff of other, known, players. This "social" modulation of decision-making was found to engage the dorsomedial prefrontal cortex and its inhibitory connectivity to the middle cingulate cortex. This pattern might underpin decision-making for known others via self-other distinction processes associated with dorsomedial prefrontal areas, with this in turn promoting the inhibition of socially oriented responses through the downregulation of the midcingulate node of the empathy network.
... If diffusion of responsibility is a danger to secure code production, then how might it be reduced? One suggestion from the literature is that diffusion can be reduced when an individual is de-anonymized or more easily held accountable [59,60]. Developers may find themselves accountable to either the ingroup or the Anon. ...
We apply a social and cognitive psychological approach to better understand software developers’ perceptions of secure software development. Drawing upon psychological theories of social identity and cognitive processing, we illustrate how software developers’ self-defined social identities affect their approaches to development. We also point to behaviours that might indicate areas of increased risk of project delays or failure. Professional freelance software developers together with current computer science students addressed considerations of risk and security during development. A thematic analysis extracted three core themes of responsibility, risk, and optimism. We show how language used about responsibility for code security is framed through concepts of diffusion, displacement, and acceptance of responsibility. We also examine the way developers orientate to risk awareness, appetites for risk, and risk mitigation strategies. Examples of unrealistic optimism biases are highlighted and discussed. We discuss our findings in relation to psychological theories of responsibility, decision making and heuristics and biases, alongside prior work within software engineering. We conclude with a discussion of the advantages of using a psychological lens to examine the rationalisations and trade-offs made by developers when working with security in software.
... The average funding amount of a project increases the probability of the crowdfunding performance [49]. However, in some instances where there is less risk concerning the project campaign, there is a high probability of success [50]. Crowdfunding is characterised by less risk and a transparent source of finance. ...
The purpose of this study was to establish the determinants of crowdfunding campaign successes of African small-to-medium enterprises (SMEs) during the COVID-19 pandemic. The study utilised cross-sectional data, which were collected from TheCrowdDataCentre database. This consisted of 215 crowdfunding projects in Africa during the COVID-19 pandemic. The logistic and ordinary least squares (OLS) regression models were specified to test the research questions of the study. The results of the study documented that the average pledged amount and number of backers variables were positively and significantly related to crowdfunding success. This accords with the signalling theory. Many backers and higher amount pledges signal investor confidence in the project. The results of the study also show that a crowdfunding campaign’s success was positively related to the number of updates. This is consistent with the information asymmetry theory, as frequent updates symptomize transparency; hence, backers will have more information, which will spur them to invest more in the project. These results provide guidelines to practitioners and entrepreneurs on the factors that are important in harnessing crowdfunding resources from crowdfunding sources to ensure the financial sustainability of SMEs as the world emerges from the COVID-19 pandemic.
... Hence, this study postulates that students have additional benefits from parents' financial head roles. That is, students are taught not only about financial knowledge of monetary value (Kim et al., 2017), money savings, use of credit cards and ratings (Angulo-Ruiz and Pergelova, 2015), but also about social responsibility and preferences (Pahlke et al., 2015;Eriksen et al., 2020;Phung et al., 2021). ...
Purpose
This study aims to provide evidence on the importance of parental financial heads in the family in promoting students' financial literacy levels and budgeting habits.
Design/methodology/approach
Using survey data on 730 college students in Vietnam, this study investigated the relationship between parental financial heads, students' financial literacy and budgeting habits. Multiple regression and logit function are the primary approaches in the study.
Findings
This study found a positive association between parental head roles and students' financial literacy and budgeting habits after controlling for demographics. Students whose parents are primarily responsible for financial decisions in the family perform higher in financial literacy and make a budget more frequently. The results are robust to alternative approaches.
Practical implications
This study’s results help parents, especially mothers who are often more vulnerable in the family, better understand the important role of being the financial deciders in the family and how this can increase their children's financial literacy and help their children manage money more effectively.
Originality/value
This is the first study to address the importance of parents' head roles in enhancing students' financial literacy and budgeting behaviour.
... This strands of literature attributes the findings to self-image protection (Larrick, 1993), the tendency to seek variety for others (Choi et al., 2006) and the myopic loss aversion of investment managers (Eriksen and Kvaloy, 2010). 8 Risk aversion increases when somebody else's payoff is involved, particularly when investment managers make decisions in line with what they believe the clients would invest for themselves (with the degree of risk aversion increasing with the level of social distance between the investment managers and investors) (Pahlke et al., 2015;Fullbrunn and Luhan, 2015;Montinari and Rancan, 2018). Our paper contributes to the literature by utilizing unique institutional ownership data as an actual sample from real life rather than an experimental setup. ...
Using unique equity ownership data, we investigate the stock picking preferences and return forecasting performances of institutional investors that manage their own money against those that manage others’. We reveal that these investors’ preferences significantly differ in historical patterns, liquidity and prudence when picking stocks. In particular, ‘own money managers’ display a risk-seeking behaviour whereas “others’ money managers” exhibit risk-averse characteristics. However, our results indicate that both types of investors are well informed, albeit own money managers excel in the short-term while others’ money managers are successful in the long-term.
