How does Time Pressure Affect Individual Attitudes towards Uncertainty?

Abstract: Measurements of uncertainty attitudes have been studied extensively. The majority of research concentrate on the source of uncertainty concerned risk with known probability, while the other source of uncertainty concerned ambiguity with unknown probabilities is gradually but surely becoming more widely acknowledged. Unlike most previous work, which only focus on one type of uncertainty, I analyze the impact of time pressure on individual risk and ambiguity attitudes jointly in a pre-registered survey experiment with 264 participants. I test the effect of time pressure on risk aversion, ambiguity aversion, their perceived level of ambiguity (a-insensitivity) and noise. By separating noise in the decision-making process from the true preferences, I find no statistically significant effect of time pressure on risk and ambiguity aversion at either the individual or the aggregate levels. In line with previous literature, there is suggestive evidence that time pressure decreases the perceived level of ambiguity (increases a-insensitivity). Moreover, I find suggestive evidence that time pressure increases noisy decision making in the ambiguity aversion elicitation task. In addition, I also find evidence that noise biases the baseline measure of risk aversion and perceived level of ambiguity(a-insensitivity) at the aggregate level. These findings can help explain many realistic economic and financial issues such as policy-making rationality and financial bias under time constraints.