Enhancing Autonomy to Motivate Effort: An Experiment on the Delegation of Contract Choice
In: Research in Experimental Economics; Experiments in Organizational Economics, p. 141-157
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In: Research in Experimental Economics; Experiments in Organizational Economics, p. 141-157
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In: NBER Working Paper No. w27319
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In: CESifo Working Paper No. 8102
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In: Journal of risk and uncertainty, Volume 61, Issue 3, p. 211-244
ISSN: 1573-0476
AbstractIndividuals tend to underprepare for rare, catastrophic events because of biases in risk perception. A simple form of broad bracketing—presenting the cumulative probability of loss over a longer time horizon—has the potential to alleviate these barriers to accurate risk perception and increase protective actions such as purchasing flood insurance. However, it is an open question whether broad bracketing effects last over time: There is evidence that descriptive probability information is ignored when decisions are based on "experience" (repeatedly and in the face of feedback), which characterizes many protective decisions. Across six incentive-compatible experiments with high stakes, we find that the broad bracketing effect doesnotdisappear or change size when decisions are made from experience. We also advance our understanding of the mechanisms underlying broad bracketing, finding that, while cumulative probability size is a strong driver of the effect, this is dampened for larger brackets leading people to be less sensitive to probability size.
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