The effect of fast and slow decisions on risk taking

We experimentally compare fast and slow decisions in a series of experiments on financial risk taking in three countries involving over 1700 subjects. To manipulate fast and slow decisions, subjects were randomly allocated to responding within 7 seconds (time pressure) or waiting for at least 7 or 20 seconds (time delay) before responding. To control for different effects of time pressure and time delay on measurement noise, we estimate separate parameters for noise and risk preferences within a random utility framework. We find that time pressure increases risk aversion for gains and risk taking for losses compared to time delay, implying that time pressure increases the reflection effect of Prospect Theory. The results for gains are weaker and less robust than the results for losses. We find no significant difference between time pressure and time delay for loss aversion (tested in only one of the experiments). Time delay also leads to less measurement noise than time pressure and unconstrained decisions, and appears to be an effective way of decreasing noise in experiments.     

Nationalism and patriotism as determinants of European identity and attitudes towards the euro

The present study investigates national identity and European identity as determinants of attitudes towards the single European currency, the euro. It is assumed that support of the euro depends on a positive European identity which may be affected by patriotism and nationalism as different types of national identity. Sentimental and instrumental attachment to one’s own nation, and optimistic expectations about Austrian future are included as determinants of patriotism and nationalism. A sample of 318 participants completed a questionnaire. Results give evidence for impacts of national and European identity on the attitudes towards the euro.     

Social representations of the euro in Austria

In summer 1997, a survey on attitudes and social representations of the single European currency was conducted in Austria on a sample of 534 respondents. Participants were asked to fill out a questionnaire on economic expectations and psychological aspects relating to the change of the national currencies to the single European currency. In addition to the standard questionnaire distributed in all 15 EU member states (Müller-Peters et al., 1998. Explaining attitudes towards the cure. Design of a cross-national study. Journal of Economic Psychology 19, 663–680), subjects in Austria were asked to indicate what they freely associated with the term “European single currency” and to evaluate their own associations. On the basis of individuals' attitudes towards the euro, the total sample was divided into five sub-samples of (a) strong opponents of the euro, (b) moderate opponents, (c) neutral or indifferent respondents, (d) moderate supporters, and (e) strong supporters. Social representations of these sub-samples were then analysed. Firstly, frequencies of associations within the five groups were investigated by correspondence analysis. It was found that opponents associated mainly negative feelings with the euro, thinking of currency instability and financial losses in conjunction with it. Moreover, strong euro opponents feared a loss of national autonomy and the unjust distribution of EU-related benefits and costs. Supporters, on the other hand, most frequently mentioned the facilitation of tourism and trading opportunities. Comparability of prices and incomes across Europe and the stimulation of the national economy were other frequently mentioned positive consequences. Secondly, sequences of associations were analysed. Four groups showed a tendency to more extreme emotions, that is, positive or negative, at the beginning of the association process with a shift towards neutral associations after their initial associations. The belief in a stronger European identity and a threat to Austrian identity, respectively, proved to be a relevant cause for subjective support of or opposition to the euro. Moderate opposition seems to be related to anticipated financial restrictions, both at the individual and the national level.     

Loan repayment plans as sequences of instalments

Loan repayment can be viewed as a sequence of instalments. Instalments can either fall over time (i.e., repaying more in the beginning and less in the end), rise or stay constant. Three studies investigated whether the well-established preference for improvement (i.e., falling profiles) can also be observed in a loan context. Results show that consumers do prefer falling profiles over rising profiles; however, also a strong preference for constant profiles was found. These preferences for improvement and spreading even outweigh financial benefits. Consumers, hence, may sometimes opt for the financially worse loan option. Financial capability programs could benefit from including information about the perception of sequences.     

Confidence in the economy in times of crisis: Social representations of experts and laypeople

This study investigates experts’ and laypeople's social representations of the financial and economic crisis, as widely discussed in the media after the fall of Lehman Brothers in 2008. Financial experts (n = 156) and laypeople (n = 153) with low versus high confidence in the economic recovery spontaneously associated thoughts and beliefs about the crisis and to economic and political stakeholders. Following a mixed-methods approach, they evaluated economic stakeholders with regard to six trust items. The study was conducted in March 2010 in Austria, which was moderately affected by the crisis. The results indicate that economic variables (e.g., unemployment) were central to the social representations of the crisis, while underlying feelings of unfairness and egoism surfaced during the ongoing process of association. The social representation did not comprise a general criticism of the economic system. The differences between the subgroups depended on identification-based self-protection and economic knowledge. Experts and laypeople tended to attribute the economic crisis to specific stakeholders in a self-protecting way: experts blamed the media, laypeople blamed the managers, and both blamed the politicians. Interestingly, the subgroups tended to evaluate the banks as being relatively neutral. Expertise and differentiated economic knowledge was related to confidence in the economic recovery. Thus, the perceived capability of politicians in terms of competence and morality seems crucial for regaining public confidence in the economy.     

Framing of information on the use of public finances, regulatory fit of recipients and tax compliance

Information campaigns to increase tax compliance could be framed in different ways. They can either highlight the potential gains when tax compliance is high, or the potential losses when compliance is low. According to regulatory focus theory, such framing should be most effective when it is congruent with the promotion or prevention focus of its recipients. Two studies confirmed the hypothesized interaction effects between recipients’ regulatory focus and framing of information campaigns, with tax compliance being highest under conditions of regulatory fit. To address taxpayers effectively, information campaigns by tax authorities should consider the positive and negative framing of information, and the moderating effect of recipients’ regulatory focus.     

“It's practical, but no more controllable”: Social representations of the electronic purse in Austria

The electronic purse (chip-card) is promoted as an option offering consumers an easy means of payment. It also offers advantages to traders and banks by reducing transaction costs. However, successful launching of the electronic purse depends mainly on consumers' acceptance, which in the past was very low in Austria. We study consumers' acceptance of the electronic purse, cash and established non-cash payment systems by analysing social representations of payment facilities. Semantic contents of associations raised in response to the stimulus words “means of payment in general”, “cash”, “cheque”, “ATM-card”, “credit-card” and “electronic purse” have been analysed. Overall, 264 people were studied applying two techniques: the “associative network” and the “conceptual network”. It is shown that means of payment are categorised on two dimensions: cash and non-cash. Non-cash payment facilities are characterised by high abstraction levels, and loss of subjective control over expenditures. The electronic purse is perceived as highly dissimilar to other means of payments.