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The description-experience gap in risky choice
- Trends in Cognitive Sciences
, 2009
"... According to a common conception in behavioral decision research, two cognitive processes-overestimation and overweighting-operate to increase the impact of rare events on people's choices. Supportive findings stem primarily from investigations in which people learn about options via descripti ..."
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Cited by 44 (10 self)
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According to a common conception in behavioral decision research, two cognitive processes-overestimation and overweighting-operate to increase the impact of rare events on people's choices. Supportive findings stem primarily from investigations in which people learn about options via descriptions thereof. Recently, a number of researchers have begun to investigate risky choice in settings in which people learn about options by experiential sampling over time. This article reviews work across three experiential paradigms. Converging findings show that when people make decisions based on experience, rare events tend to have less impact than they deserve according to their objective probabilities. Striking similarities in human and animal experience-based choices, ways of modeling these choices, and their implications for risk and precautionary behavior are discussed.
Information search with situation-specific reward functions
- Judgment and Decision Making
, 2012
"... The goal of obtaining information to improve classification accuracy can strongly conflict with the goal of obtaining information for improving payoffs. Two environments with such a conflict were identified through computer optimization. Three subsequent experiments investigated people’s search beha ..."
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Cited by 3 (3 self)
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The goal of obtaining information to improve classification accuracy can strongly conflict with the goal of obtaining information for improving payoffs. Two environments with such a conflict were identified through computer optimization. Three subsequent experiments investigated people’s search behavior in these environments. Experiments 1 and 2 used a multiple-cue probabilistic category-learning task to convey environmental probabilities. In a subsequent search task subjects could query only a single feature before making a classification decision. The crucial manipulation concerned the search-task reward structure. The payoffs corresponded either to accuracy, with equal rewards associated with the
The role of representation in experience-based choice
- Judgment and Decision Making
, 2009
"... Recently it has been observed that different choices can be made about structurally identical risky decisions depending on whether information about outcomes and their probabilities is learned by description or from experience. Current evidence is equivocal with respect to whether this choice “gap ” ..."
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Cited by 2 (1 self)
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Recently it has been observed that different choices can be made about structurally identical risky decisions depending on whether information about outcomes and their probabilities is learned by description or from experience. Current evidence is equivocal with respect to whether this choice “gap ” is entirely an artefact of biased samples. The current experiment investigates whether a representational bias exists at the point of encoding by examining choice in light of decision makers ’ mental representations of the alternatives, measured with both verbal and nonverbal judgment probes. We found that, when estimates were gauged by the nonverbal probe, participants presented with information in description format (as opposed to experience) had a greater tendency to overestimate rare events and underestimate common events. The choice gap, however, remained even when accounting for this judgment distortion and the effects of sampling bias. Indeed, participants ’ estimation of the outcome distribution did not mediate their subsequent choice. It appears that experience-based choices may derive from a process that does not explicitly use probability information.
To give or not to give: Parental experience and adherence to the Food and Drug Administration warning about over-the-counter cough and
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Web Service Representation and Retrieval Designed for Service Oriented Enterprises
, 2013
"... The main objective of this thesis is to present a method of description that satisfies a varied set of needs issued by Web service market participants. This method of description is to raise the quality of the whole process of Web service description and retrieval for the sake of organizations follo ..."
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The main objective of this thesis is to present a method of description that satisfies a varied set of needs issued by Web service market participants. This method of description is to raise the quality of the whole process of Web service description and retrieval for the sake of organizations following the Service Oriented Architecture paradigm taking into account various issues important from the information economics perspective. To validate this statement a methodology built upon the Concept-Knowledge theory, Design Science and the traditional research tools was applied. The research activities were focused on establishing the Key Requirement Aspects from the domain literature supported with a variety of business users willing to participate in informal interviews. The requirements formulated took into account the varying utility of a Web service for its users in the electronic economy setting. The successful extraction of the Key Requirement Aspects allowed for critical analysis of the available solutions used to describe and retrieve Web service function-
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, 2012
"... Ubiquitous log odds: a common representation of probability and frequency distortion in perception, action, and cognition ..."
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Ubiquitous log odds: a common representation of probability and frequency distortion in perception, action, and cognition
The Relevance of a Probabilistic Mindset in Risky Choice
"... Choice preferences can shift depending on whether outcome and probability information about the options are provided in a description or learned from the experience of sampling. We explored whether this description-experience “gap ” could be explained as a difference in probabilistic mindset, that i ..."
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Choice preferences can shift depending on whether outcome and probability information about the options are provided in a description or learned from the experience of sampling. We explored whether this description-experience “gap ” could be explained as a difference in probabilistic mindset, that is, the explicit consideration of probability information in the former but not the latter. We replicated the gap but found little evidence to support our main hypothesis. Nevertheless, the data inspired a number of interesting proposals regarding experimental design, preference for probability information, sampling strategies, optimal presentation format, and the probability judgment probe.
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"... A series of papers aimed at characterizing how decision makers (DMs) make choices based on past experiences have revealed patterns that differ from those reported from description based decision making studies. Choices based on past experiences typically involve providing a DM direct experience with ..."
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A series of papers aimed at characterizing how decision makers (DMs) make choices based on past experiences have revealed patterns that differ from those reported from description based decision making studies. Choices based on past experiences typically involve providing a DM direct experience with gambles. Experience takes the form of feedback provided from independent random plays (or realizations) from a gamble. The focus of this research is on experience based decision making where experience does not have real consequences, but is thought of as a learning process. The DM is free to sample from the source generating the gambles, without consequence, as many times as needed. During sampling, outcomes from the gamble have no bearing on the final payment. Once the DM feels ready, he/she chooses a gamble for a one-shot play for real money. Two experiments are presented to test the impact of three manipulations: experience, initial information states, and motivating incentives. The dependent variables include the DMs ’ choices, experienced samples, and estimated functional forms of Cumulative Prospect Theory. Results indicated that the manipulation of experience in the presence of a full description produced almost no effects. The manipulation of initial information states significantly influenced choices, the perceptions of risk, and the experienced samples. Choices show significant differences due to initial information that support under-weighting of small probabilities
Observed Variability and Values Matter: Toward a Better Understanding of Information Search and Decisions from Experience
"... The search for different options before making a consequential choice is a central aspect of many important decisions, such as mate selection or purchasing a house. Despite its importance, surprisingly little is known about how search and choice are affected by the observed and objective properties ..."
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The search for different options before making a consequential choice is a central aspect of many important decisions, such as mate selection or purchasing a house. Despite its importance, surprisingly little is known about how search and choice are affected by the observed and objective properties of the decision problem. Here, we analyze the effects of two key properties in a binary choice task: the options ’ observed and objective values, and the variability of payoffs. First, in a large public data set of a binary choice task, we investigate how the observed value and variability relate to decision-makers ’ efforts and preferences during search. Furthermore, we test how these properties influence the chance of correctly identifying the objectively maximizing option, and how they affect choice. Second, we designed a novel experiment to systematically analyze the role of the objective difference between the options. We find that a larger objective difference between options increases the chance for correctly identifying the maximizing option, but it does not affect behavior during search and choice. Copyright © 2013 John Wiley & Sons, Ltd. key words decisions from experience; information search; bounded rationality; maximization; payoff variability; memory In many important real-life decisions, we seek out informa-tion about different possibilities before making a choice. For example, most people would not purchase a house with-out looking at several possibilities or marry a partner without
