Tracing risky decisions for oneself and others: The role of intuition and deliberation

This study contributes to the understanding of how individuals make choices for themselves and on behalf of others in a risky environment. In a laboratory eye-tracking experiment, we investigate whether risk preferences, decision error, and information processing differ between decisions made for oneself and on behalf of others. While we find no differences in risk preferences when deciding for oneself or for someone else, individuals have a greater decision error when deciding for others. Process data partly explains these differences. Individuals spend less time, have less fixations, and inspect less information when deciding for others. We detect similar processing patterns when comparing intuitive and deliberative decision making. We argue that the processing of decisions for oneself is more effortful and involves more extensive deliberation which, in turn, is related to less decision errors

Financial well-being, COVID-19, and the financial better-than-average-effect

At the onset of the COVID-19 outbreak we conducted two surveys in the United Kingdom and Sweden (N=2021) regarding how people assess the near future economic situation within their household, nation, and the world. Together with psychological factors related to information processing we link these prospects to financial well-being. We find that, although generally very pessimistic, a substantial proportion of individuals believes that their households' economy will be doing substantially better than the national and global economy, suggesting a "financial better-than-average" effect. Furthermore, we find that the pessimism regarding future household economic situation and being financially ignorant are associated with decreased financial well-being, while the (inter)national economic situation is not. This study shows how contextual factors and personal aspects shape financial well-being during turbulent and stressful times

Trust in the government increases financial well-being and general well-being during COVID-19

We investigate the antecedents of subjective financial well-being and general well-being during the ongoing COVID-19 pandemic. In an online survey conducted in the midst of COVID-19 pandemic with over 1000 Swedish participants we found that distrust in the government to cope with financial (but not healthcare) challenges of the pandemic was negatively related to the feeling of financial security. In a structural equation model, we also show that trust in government to deal with financial challenges of COVID-19 pandemic has a significant impact on general well-being through the mediating channel of financial well-being. In addition, trust in government to deal with healthcare challenges of COVID-19 pandemic has a significant direct impact on individuals’ general well-being. Our findings have important implications for public policy as they highlight the importance of citizens’ trust in well-functioning governmental institutions to help cope with not only healthcare, but also financial challenges of an ongoing pandemic

The arithmetic of outcome editing in financial and social domains

Outcome editing refers to a set of mental rules that people apply when deciding whether to evaluate multiple outcomes jointly or separately, which subsequently affects choice. In a large-scale online survey (n = 2062) we investigate whether individuals use the same outcome editing rules for financial outcomes (e.g., a lottery win) and social outcomes (e.g., a party with friends). We also test the role of numeric ability in explaining outcome editing. Our results show that people’s preferences for combining or separating events depend on whether those events are in the financial or the social domain. Specifically, individuals were more likely to segregate social outcomes than monetary outcomes, except for when all outcomes were negative. Moreover, numeric ability was associated with preferences for outcome editing in the financial domain but not in the social domain. Our findings extend the understanding of the arithmetic operations underlying outcome editing and suggest that people rely more on calculations when making choices involving multiple financial outcomes and more on feelings when making choices involving social outcomes.Funding: Thule Foundation; Lansforsakringar Alliance Research Foundation Grant [P15/2]; Swedish Research CouncilSwedish Research CouncilEuropean Commission [2018-01755]</p

Gender differences in financial literacy : The role of stereotype threat

Understanding why women display less financial literacy than men is crucial for developing policies to reduce gender inequalities and improve womens financial behavior. In a series of studies, we investigate whether the observed gender gap in financial literacy can be identified in nonnumerical contexts, if it can be related to confidence in financial matters, and if it can be attributed to stereotype threat, which posits that inbuilt prejudices about gender and finance undermine performance among women in tasks involving finance. We utilized data from the Swedish Standardized Scholastic Aptitude Test ( n = 40,662) to investigate if there is a greater difference in reading comprehension between men and women when reading about topics related to finance. Furthermore, we conducted large-scale online data collection ( n = 1989), including a survey on financial vocabulary and an experiment that manipulated the salience of the financial content across conditions when assessing financial literacy. The results show that the observed gender gap in financial literacy is robust also in a nonnumerical financial contexts and that it can not be attributed to a difference in (displayed) confidence. Finally, mediation analysis showed a significant indirect effect of gender on financial literacy through financial anxiety suggesting that a stereotype threat for women in the financial domain contributes to the observed gender gap. (c) 2021 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license ( http://creativecommons.org/licenses/by/4.0/ )Funding Agencies|Lansforsakringar Alliance Research Foundation [P15/2]; Swedish Research CouncilSwedish Research CouncilEuropean Commission; Thule Foundation grant on "Long-Term Savings"</p