糖心TV

Evaluation Periods and Decision Making in For-Profit versus Non-Profit Domains (with Carlo Perroni and Kimberley Scharf)

Investors who are more willing to accept risks when evaluating their investments less frequently are said to exhibit myopic loss aversion (MLA). Several experimental studies (Gneezy and Potters, 1997; Haigh and List, 2005, Langer and Weber, 2005, etc.) found that, in the “for-profit” domain, subjects bet significantly higher amounts of money on a risky lottery when they observe only a cumulative outcome of several realizations of the lottery (long evaluation period) than when they observe a series of individual realizations of this lottery (short evaluation period). We analyse decision making in the short evaluation period and the long evaluation period in the “non-profit” domain and find the reverse effect: people tend to donate more to charity when the evaluation period is short even if charitable giving involves risk. We provide a theoretical explanation of our findings which does not require an assumption of loss-aversion.