Playing for peanuts: Why is risk seeking more common for low-stakes gambles?

Previous research has found that decision makers are more risk seeking for small-stakes gambles than for large-stakes gambles. This “peanuts effect” is not easily explained by Prospect Theory. Two experiments examined the range of circumstances in which peanuts effects occur and tested the hypothesi...

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Bibliographic Details
Published in:Organizational behavior and human decision processes 2005-05, Vol.97 (1), p.31-46
Main Authors: Weber, Bethany J., Chapman, Gretchen B.
Format: Article
Language:English
Subjects:
Biological and medical sciences
Cognition. Intelligence
Decision analysis
Decision making
Decision making. Choice
Decision theory
Disappointment
Emotions
Fundamental and applied biological sciences. Psychology
Gambling
Human behaviour
Hypothesis testing
Magnitude effect
Organization theory
Outcome magnitude
Peanuts effect
Preference reversals
Preferences
Probability
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Regret
Risk
Risk factors
Studies
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Summary:Previous research has found that decision makers are more risk seeking for small-stakes gambles than for large-stakes gambles. This “peanuts effect” is not easily explained by Prospect Theory. Two experiments examined the range of circumstances in which peanuts effects occur and tested the hypothesis that anticipated disappointment or anticipated regret explains the peanuts effect. The results suggest that the peanuts effect is related to disappointment, but do not support a connection between the peanuts effect and regret.
ISSN:0749-5978
1095-9920
DOI:10.1016/j.obhdp.2005.03.001