People Place Larger Bets When Risky Choices Provide a Postbet Option to Cash Out

Abstract

After a risky choice, decision makers must frequently wait out a delay period before the outcome of their choice becomes known. In contemporary sports-betting apps, decision makers can “cash out” of their bet during this delay period by accepting a discounted immediate payout. An important open question is how availability of a postchoice cash-out option alters choice. We investigated this question using a novel gambling task that incorporated a cash-out option during the delay between bet and outcome. Across two experiments (N = 240 adults, recruited via Prolific), cash-out availability increased participants’ bet amounts by up to 35%. Participants who were more likely to cash out when odds..