What is it about?
People often buy modest-stakes insurance; examples include buying extra cover for washing machines in case of breakdowns, or for flight tickets if there are cancelations. We wanted to examine why people want to pay for such insurance, using an experiment with real money and a computational model that examines the human decision-making process. Our results show that framing small monetary choices as insurance, as opposed to gambles, or adding time pressure to insurance choice, is related to a tendency to choose with more intent. However, we only observe this at the decision-process level, not at the level of final choices.
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Why is it important?
Our research suggests that changes in context can shape the process in how people evaluate risk in everyday, low- to modest-stake situations.
Read the Original
This page is a summary of: Reducing modest risks: Valuation or disposition?, Journal of Experimental Psychology Applied, December 2025, American Psychological Association (APA),
DOI: 10.1037/xap0000561.
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