DECISION RISK IN DYNAMIC 2-STAGE CONTEXTS - BEYOND THE STATUS-QUO

The authors developed and tested a dynamic model of decision risk that integrates the economic literature on the ''house money effect'' with the psychological literature on image theory. One hundred thirty-five participants made 35 decisions during the course of a longitudinal, r andomized experiment. These decisions were made by high and low past p erformers under 1 of 4 different conditions resulting from crossing th e decision frame (gain vs. loss) with goal specificity (specific vs. d o your best). The results imply that the effect of decision frames on risk that have been well documented in static contexts do not generali ze to dynamic decision contexts.