Risky Decisions, Affect, and Cognitive Load: Does Multi-tasking Reduce Affective Biases?
نویسنده
چکیده
This paper examines the effects of cognitive load on risky choices in a capital budgeting setting. Research by Moreno et al. (2002) demonstrated that affective reactions to a choice can alter risk-taking tendencies. Their control participants’ decisions were influenced by the framing effects of prospect theory. However, once affective cues were introduced, participants’ reactions to these cues dominated the framing effect, leading to prospect theory inconsistent choices. Some studies of cognitive load show that high cognitive load leads to greater reliance on affective cues (Shiv and Fedorikhin 1999). Other research has shown high cognitive load may impair processing of affective information (Hoerger et al. 2010; Sevdalis and Harvey 2009). In this paper I am able to replicate the original finding in Moreno et al. (2002), but find that cognitive load moderates the affect-risk-taking relationship. Specifically, in a gain setting, cognitive load versus no load participants were more likely to make prospect theory consistent choices, despite the presence of affective cues. These findings suggest that cognitive load may inhibit processing of affective information, and is an important consideration when studying decision making in managerial accounting. Future accounting experiments on the effects of biases and heuristics should also consider the moderating effects of cognitive load.
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