The Impact of Time Restrictions on Economic Decisions

Abstract: Many decisions in economics and finance have to be made under time pressure. In this paper, we conduct an empirical experiment to ascertain how introducing time limits affect behavior. We include three well known aspects of human behavior that have been well studied in the field of behavioral economics; the dictator game, a risk aversion task and the prisoners' dilemma. No difference between treatments can be found in the dictator game or prisoners' dilemma. In the risk aversion task we find that that males are affected and act more risk averse when restricted by time. There is, however, a strong learning effect as the difference is only present the first time subject have to perform the task.