Trying to think: An experimental study of the impact of cognitive load on financial risk taking by groups

In today's corporate arena, decision-making processes are performed by professional groups such as directorates and investment committees. These decisions are often made under cognitive load. This study explores the impact of cognitive load on group investment decisions. We conduct a game-like investment experiment involving individuals, groups, and gender-heterogeneous groups, with half of the participants placed under cognitive load. The findings reveal that cognitive load increases risk-taking for both individuals and groups. Joining a group and experiencing losses in previous rounds also increase risk-taking, although the effect of past losses weakens under cognitive load. Practical implications for corporate decision-making are discussed.