Cognitive abilities and superior decision making under risk: A protocol analysis and process model evaluation
Individual differences in cognitive abilities and skills can predict normatively superior and logically consistent judgments and decisions. The current experiment investigates the processes that mediate individual differences in risky choices. We assessed working memory span, numeracy, and cognitive impulsivity and conducted a protocol analysis to trace variations in conscious deliberative processes. People higher in cognitive abilities made more choices consistent with expected values; however, expected-value choices rarely resulted from expected-value calculations. Instead, the cognitive ability and choice relationship was mediated by the number of simple considerations made during decision making --- e.g., transforming probabilities and considering the relative size of gains. Results imply that, even in simple lotteries, superior risky decisions associated with cognitive abilities and controlled cognition can reflect metacognitive dynamics and elaborative heuristic search processes, rather than normative calculations. Modes of cognitive control (e.g., dual process dynamics) and implications for process models of risky decision-making (e.g., priority heuristic) are discussed.
Volume (Year): 4 (2009)
Issue (Month): 1 (February)
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- Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Fasolo, Barbara & Misuraca, Raffaella & McClelland, Gary H., 2003. "Individual differences in adaptive choice strategies," Research in Economics, Elsevier, vol. 57(3), pages 219-233, September.
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