How to Change the Weight of Rare Events in Decisions From Experience

Jared M. Hotaling, Andreas Jarvstad, Chris Donkin, Ben R. Newell

Research output: Contribution to journalArticlepeer-review

Abstract

When people make risky choices, two kinds of information are crucial: outcome values and outcome probabilities. Here, we demonstrate that the juncture at which value and probability information is provided has a fundamental effect on choice. Across four experiments involving 489 participants, we compared two decision-making scenarios: one in which value information was revealed during sampling (standard) and one in which value information was revealed after sampling (value ignorance). On average, participants made riskier choices when value information was provided after sampling. Moreover, parameter estimates from a hierarchical Bayesian implementation of cumulative-prospect theory suggested that participants overweighted rare events when value information was absent during sampling but did not overweight such events in the standard condition. This suggests that the impact of rare events on choice relies crucially on the timing of probability and value integration. We provide paths toward mechanistic explanations of our results based on frameworks that assume different underlying cognitive architectures.

Original languageEnglish (US)
Pages (from-to)1767-1779
Number of pages13
JournalPsychological Science
Volume30
Issue number12
DOIs
StatePublished - Dec 1 2019
Externally publishedYes

Keywords

  • cumulative-prospect theory
  • decision making
  • decisions from experience
  • description–experience gap
  • hierarchical Bayesian modeling
  • open data
  • open materials
  • preregistered
  • sampling

ASJC Scopus subject areas

  • Psychology(all)

Fingerprint Dive into the research topics of 'How to Change the Weight of Rare Events in Decisions From Experience'. Together they form a unique fingerprint.

Cite this