The role of representation in experience-based choice
AbstractRecently 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.
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Bibliographic InfoArticle provided by Society for Judgment and Decision Making in its journal Judgment and Decision Making.
Volume (Year): 4 (2009)
Issue (Month): 7 (December)
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decision making; decision from experience; judgment; description-experience gap; representation; uncertainty; probability.;
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- Amos Tversky & Daniel Kahneman, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Levine's Working Paper Archive
7656, David K. Levine.
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- Einav Hart & Yaakov Kareev & Judith Avrahami, 2012. "Reversal of Risky Choice in a Good versus a Bad World," Discussion Paper Series dp619, The Center for the Study of Rationality, Hebrew University, Jerusalem.
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