Abstract
Many decisions involve attempts to advance (level up) despite risk of losing what has already been gained. This research examined how permutations (ascending or descending sequences of level labels) and labels ending in terminal values of the sequence affect risk taking. Across three experiments using a “win-more-or-lose-it-all” game, participants made a series of decisions to level up or opt out and retain previously obtained chances to win. Consistent with hypotheses that approaching a terminal value in a sequence (such as a countdown sequence ending in 1) would make risk loom large, results consistently showed earlier opt-out decisions for descending permutations ending with a terminal value than for ascending sequences or descending sequences that did not end in a terminal value. Such tendencies were also stronger for numerical than for alphabetical labels (perhaps because of greater familiarity with countdown sequences in the numerical domain).
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Notes
In study 1 and study 2, neither these measures nor the individual differences moderated any of the key effects and were removed in study 3. These factors will not be discussed further.
Study 3 was conducted in 2 continuous semesters among the same population, so we included a self-report question on whether the participant had ever participated in a similar experiment before at the second time. Along with checking the recorded e-mails, we also excluded 28 participants who self-reported previous participation. If we did not make the exclusions, the label × permutation interaction with descending terminal values (b = 1.15, t(329) = 1.96, p = .05) and the label × permutation interaction with descending nonterminal values (b = .30, t(329) = .51, p = .61) remain statistically the same as reported in the main text.
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Funding
This study was funded by the Research Grant for Lifeng Yang from ShanghaiTech University (2017F0204-000–01).
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Liu, H., Yang, L. & Wegener, D.T. Effects of labeling on risk taking in “leveling-up” decisions: ascending versus descending permutations and ending in terminal values. Mark Lett 34, 125–138 (2023). https://doi.org/10.1007/s11002-022-09633-8
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DOI: https://doi.org/10.1007/s11002-022-09633-8