Decision Risk in Dynamic Two-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, randomized experiment. These decisions were made by high and low past performers under 1 of 4 different conditions resulting from crossing the decision frame (gain vs. loss) with goal specificity (specific vs. do your best). The results imply that the effect of decision frames on risk that have been well documented in static contexts do not generalize to dynamic decision contexts.