Go big or go home: Risk seeking for experiential choices

In decision making under risk, do consumers evaluate intangible, experiential options in a choice set in the same way they evaluate tangible, material options? Prior research on prospect theory, typically using either monetary or material objects as choice options, demonstrates that consumers are risk averse for choices involving gains, with a fairly robust tendency to favor a more certain outcome even when that outcome is less desirable. The present research focuses on decision making under risk for experiential options (from movies to concert tickets to hotel stays)—identifying choices between experiential options as a realm in which prospect theory's pattern of risk aversion is weakened and sometimes reversed. Across six studies, this research demonstrates that consumers are more risk seeking for experiential choices and thus more likely to prefer more desirable options, even options that are less certain. Further, the stronger personal connection fostered by experiential (vs. material) choice options mediates risk‐seeking preferences. This work demonstrates a moderator for prospect theory and investigates the tendency toward increased risk seeking among experiential options, in this paper termed a “go big or go home” strategy. Conversely, consistent risk aversion is evidenced for choices involving material options (from clothing to accessories and furniture).     

Self–other decision making and loss aversion

In eight studies, we tested the prediction that making choices for others involves less loss aversion than making choices for the self. We found that loss aversion is significantly lessened among people choosing for others in scenarios describing riskless choice (Study 1), gambling (Studies 2 and 3), and social aspects of life, such as likeably and status (Studies 4a–e). Moreover, we found this pattern in relatively realistic conditions where people are rewarded for making desirable (i.e., profitable) choices for others (Study 2), when the other for whom a choice is made is physically present (Study 3), and when real money is at stake (Studies 2 and 3). Finally, we found loss aversion is moderated when factors associated with self–other differences in decision making are taken into account, such as decision makers’ construal level (Study 4a), regulatory focus (Study 4b), degree of information seeking (Study 4c), omission bias (Study 4d), and power (Study 4e).     

Dissociable effects of basolateral amygdala lesions on decision making biases in rats when loss or gain is emphasized

Individuals switch from risk seeking to risk aversion when mathematically identical options are described in terms of loss versus gains, as exemplified in the reflection and framing effects. Determining the neurobiology underlying such cognitive biases could inform our understanding of decision making in health and disease. Although reports vary, data using human subjects have implicated the amygdala in such biases. Animal models enable more detailed investigation of neurobiological mechanisms. We therefore tested whether basolateral amygdala (BLA) lesions would affect risk preference for gains or losses in rats. Choices in both paradigms were always between options of equal expected value—a guaranteed outcome, or the 50:50 chance of double or nothing. In the loss-chasing task, most rats exhibited strong risk seeking preferences, gambling at the risk of incurring double the penalty, regardless of the size of the guaranteed loss. In the betting task, the majority of animals were equivocal in their choice, irrespective of bet size; however, a wager-sensitive subgroup progressively shifted away from the uncertain option as the bet size increased, which is reminiscent of risk aversion. BLA lesions increased preference for the smaller guaranteed loss in the loss-chasing task, without affecting choice on the betting task, which is indicative of reduced risk seeking for losses, but intact risk aversion for gains. These data support the hypothesis that the amygdala plays a more prominent role in choice biases related to losses. Given the importance of the amygdala in representing negative affect, the aversive emotional reaction to loss, rather than aberrant estimations of probability or loss magnitude, may underlie risk seeking for losses.     

Regret aversion and decision process quality: Effects of regret salience on decision process carefulness

A considerable amount of past research has examined the effects of regret aversion on which options decision makers choose. However, past research has largely neglected to address the effect of regret aversion on the decision process. We conducted five experiments to examine the effect of making regret salient on decision process quality. We predicted that increased regret aversion would lead to more careful decision processing. The results consistently supported this prediction across the different decision situations, incentive structures, regret salience manipulations, and dependent variables used. In all experiments making regret salient led decision makers to take significantly longer to reach a decision. In Studies 2a, 2b, and 4 it also led participants to collect significantly more information before making a choice. Implications and future directions are discussed.     

Working Hard to Take the Easy Way Out: How the Need for Cognitive Closure Shapes Strategic Effort Investment to Ease Future Decision Making

Consumers make countless decisions each day that force them to determine the amount of effort they are willing to invest into the decision process. Due to their desire for immediate resolution and propensity to seize upon available options, individuals high in the need for cognitive closure make decisions that are traditionally associated with reduced effort investment. Counter to this traditional perspective, this research demonstrates that those seeking closure strategically invest effort into the decision process, so long as the initial effort investment is expected to simplify similar decisions in the future. Three experiments demonstrate that those motivated by closure put forth greater effort when they expect to repeat the decision (Experiment 1) and in contexts where a justifiable choice option is not readily available (Experiment 2). Furthermore, this effort investment is shown to payoff in terms of streamlining subsequent decision making (Experiment 3). These findings detail the strategic use of effort by those seeking closure to ease future decision making and thus provide a conceptual framework for when and why those seeking closure allocate effort in decision making.     

Prospects behind bars: Analyzing decisions under risk in a prison population

Criminal activity often involves considerable risks. It is therefore not surprising that criminals have been speculated to differ from noncriminals in risk attitude. Yet, few data exist to support this assumption. Moreover, the psychological underpinnings of differences in risk attitude are currently little understood. We presented prisoners and controls with sets of risky decision tasks and modeled their responses using cumulative prospect theory (CPT). The two groups showed several differences. Prisoners were more risk seeking than nonprisoners in lotteries involving losses, but they were less risk seeking in lotteries involving high-probability gains. Bestfitting CPT parameters indicated a reduced sensitivity to outcomes, for both gains and losses, and a stronger loss aversion among prisoners. In addition, prisoners showed a diminished sensitivity to the probability of gains. Our results contribute to a better understanding of prisoners’ risk attitudes and the underlying mechanisms that distinguish prisoners from nonprisoners and may thus help improve interventions designed to prevent crime.     

The behavioural components of risk aversion

There have been few theoretical investigations of risk attitude within Cumulative Prospect Theory (CPT). Unlike expected utility theory, in CPT risk attitude is affected by loss aversion and decision weight distortions as well as utility curvature for both gains and losses. We introduce two variants of the risk premium—the total risk premium relative to expected value, and the behavioural risk premium relative to the imputed behavioural expected value. Approximate solutions for each using Pratt's [(1964). Risk aversion in the small and in the large. Econometrica, 32, 122-136] methodology show that the CPT risk premium is composed of two components: the first, analogous to the Pratt-Arrow coefficient of risk aversion, governs the contribution of the curvature of the value function to risk aversion; the second governs the first-order contribution of loss aversion. Both of these terms are made more complex by the introduction of decision weights. We analyse the contribution of each component and provide sufficient conditions to ensure risk aversion in CPT.     

The role of risk,regret, and rejoice in non-instrumental information seeking

Standard theories suggest that humans should seek information only when it can help them make better decisions. However, recent work suggests that people choose to seek information even when it cannot influence the outcome of a choice. Across three experiments, we examined how this preference for non-instrumental information was related to the risk, regret, and rejoice associated with different choices. Experiment 1 examined how risk preference informed the appetite for non-instrumental information and tested how risk and information preference in a gamble-task related to the desire for knowledge across a range of hypothetical real-world scenarios. In Experiment 2, we tested how risk, operationalized as variance, related to non-instrumental information seeking when allowing participants to mentally simulate the potential outcomes of gambles. In Experiment 3, we provided explicit feedback about forgone options, intending to make the potential for regret or rejoice more salient. Taken together, our results show a consistent appetite for information that was robust to changes across all experimental manipulations. We found some evidence of a positive correlation between the desire for knowledge and the level of anticipated regret (Experiment 1), but overall, our data appear more consistent with the idea that non-instrumental information seeking is driven by a general aversion to uncertainty than by an attempt to regulate specific future emotions.     

Criteria instability and the isolated option effect

In two-stage choices, decision makers often compare a new (isolated) option with the winner from the first stage. Previous research has identified a choice advantage for an isolated option, ostensibly due to loss aversion. We propose an alternative mechanism suggesting that instability of the criteria used in each choice stage is the main driver of the isolated option effect. Results from a series of experiments support the criteria instability account and not loss aversion as the explanation for the isolated option effect.     

不同风险态度大学生职业决策的线索偏好及信息搜索特点

探讨不同风险态度的大学生在职业决策中的线索偏好及信息搜索特点。以大学生为被试,以Weber的风险态度问卷为工具,筛选出风险寻求大学生26名,风险规避大学生23名,采用信息板技术进行模拟职业决策研究。结果发现：（1）风险寻求和风险规避大学生在职业决策中点击次数最多的职业属性均依次是工资、发展空间和兴趣;（2）在信息板的点击次数上,风险寻求被试比风险规避被试更多;在搜索模式上,风险寻求组被试和风险规避组的得分均为正值,但风险寻求组被试的得分显著高于风险规避组。因此,大学生职业决策中偏好的线索主要是工资、发展空间和兴趣;风险寻求者的信息搜索模式与风险规避者不同,风险寻求者更倾向于以选项为基础的搜索模式。     

Bringing (Contingent) Loss Aversion Down to Earth — A Comment on Gal & Rucker's Rejection of “Losses Loom Larger Than Gains”

Although we disagree with some of Gal and Rucker's (2018 – this issue) specific evidence and with their overstated conclusion regarding loss aversion, their overarching message makes a worthwhile contribution. In particular, loss aversion is less robust and universal than has been assumed while its most prominent empirical support — the endowment effect and the status quo bias — is susceptible to multiple alternative explanations. Instead of accepting loss aversion as true unless proven otherwise, we should treat it like other decision properties and psychological accounts that are contingent on various moderators and call for an analysis of psychological mechanisms. In this commentary, we suggest that gatekeepers, such as reviewers, tend to favor loss aversion and other widely accepted tendencies, while demanding a much higher support‐threshold for alternative or newer accounts. Although building on prior theories and concepts is of course important, the bias in favor of incumbent assumptions can impede scientific progress, bar new ideas from the literature, and reinforce well‐established but contingent notions that may apply under some conditions but not others.     

Between a rock and a hard place: The failure of the attraction effect among unattractive alternatives

Many important decisions that consumers face involve choosing between options that are unattractive or undesirable—the proverbial “lesser of two evils.” Consumers, who face budget or geographical constraints, for example, end up with mostly undesirable consideration sets; yet a choice is necessary. We examine the role of option set desirability in the context of the well-established attraction effect. In five studies, we show that the attraction effect occurs in desirable domains but is eliminated when all the options are undesirable (Experiments 1–4). We further find that this asymmetric effect is consistent with a shift in decision makers' processing styles. Decision makers show more vigilant processing when making choices among undesirable (vs. desirable) domains (Experiments 3A and 3B), which results in an attenuated attraction effect (Experiment 4). Our results indicate that the attraction effect might not be as robust as generally thought and establishes (un)desirability as an important boundary condition.     

The Association Between the Attitude of Food‐Waste‐Aversion and BMI: An Exploration in India and the United States

This research proposes the existence of a hitherto undocumented attitude related to food wastage: the attitude of food‐waste‐aversion. We develop a 6‐item scale including affective, cognitive, and conative components to measure this attitude and empirically investigate its properties in two countries using novel datasets. We test for food‐waste‐aversion scale's convergent validity by demonstrating that it is correlated in the expected direction with five theoretically related constructs—frugality, social responsibility, spendthriftness, self‐control, and materialism (Studies 1a and 1b)—and with BMI (Studies 2 and 3). We provide more indirect evidence of the scale's convergent validity by documenting that the link between food‐waste‐aversion and BMI is attenuated among those who practice refrigerating leftovers (Study 3). We also document that the food‐waste‐aversion scale is distinct from general waste aversion and external meal‐cessation rules, thus providing evidence of discriminant validity (Studies 1a, 1b, and 1c). Taken together, these results provide construct validity for the novel construct of food‐waste‐aversion. We discuss the theoretical and substantive contributions of our findings.     

The ability to process emotional information predicts loss aversion

On the basis of previous research it was hypothesized that alexithymia is associated with a higher tolerance for losses. This hypothesis is extended to explore whether the putative link between loss aversion and alexithymia remains once traits associated with risk taking (sensation seeking) and broad based personality traits (the Big 5) are controlled. Participants (N = 260) completed indices of alexithymia, sensation seeking and the Big 5 and both a riskless (endowment effect) and risky (lottery task) measure of loss aversion. It was found that the higher the alexithymia score the lower the loss aversion for both riskless and risky decisions even when sex, sensation seeking and the Big 5 are taken into account. The implications for this finding are discussed in the light of a neurological explanation of the relationship between alexithymia and loss aversion.     

Better Safe than Sorry: Risking Irresponsibility by Seeking Uncertainty

Research findings differ as to whether choosing a risky option is an efficient strategy for decision makers seeking to avoid responsibility for potential failures. A risky choice may leave the final outcome to chance factors, but the decision maker can still be held responsible for choosing risk. Further, it is unclear whether a risky choice is a responsible choice. The present article investigates the putative relationship between risk‐taking and responsibility by drawing a distinction between being responsible for the outcome (R1) versus acting responsibly (R2). Four experiments were performed, in which participants were presented with scenarios describing decision makers facing a choice between a risky (uncertain) option and a riskless (certain) option, framed in terms of losses or equivalent gains. The results showed that decision makers who chose the risky alternative were judged to have acted in a less responsible manner (R2), while still being held equally responsible for the outcome (R1), unless they were ignorant of the risks involved. Choosing risk did not absolve decision makers from blame, despite being less causal and less in control than those who chose the riskless option. Risky decision makers were also judged to be more personally involved. The dissociation between R1 and R2 ratings confirms earlier findings and serves to clarify an alleged relationship between risky choices and responsibility aversion. Framing effects for own choices were found in both scenarios. In contrast, responsibility ratings were only slightly affected by frame. Copyright © 2017 John Wiley & Sons, Ltd.     

Moderating Loss Aversion: Loss Aversion Has Moderators,But Reports of its Death are Greatly Exaggerated

Loss aversion, the principle that losses impact decision making more than equivalent gains, is a fundamental idea in consumer behavior and decision making, though its existence has recently been called into question. Across five unique samples (N_total = 17,720), we tested several moderators of loss aversion, which supported a preference construction account. Across studies, more domain knowledge and experience were associated with lower loss aversion, though people of all knowledge and experience levels were loss averse. Among car buyers, those who knew more about a particular car attribute (e.g., fuel economy) were less loss averse for that attribute but not other attributes (e.g., comfort), consistent with the idea that people with less attribute knowledge are more likely to construct preferences, thereby increasing loss aversion. Additionally, older consumers were more loss averse across different loss aversion measures and studies. We discuss implications for several accounts of loss aversion, including accounts rooted in status quo bias, emotion, or ownership. In addition to discovering loss aversion moderators, we cast doubt on recent claims that loss aversion is a fallacy or is fully explained by status quo bias, risk aversion, or the educated laboratory samples often used to study loss aversion.     

The response dynamics of preferential choice

The ubiquity of psychological process models requires an increased degree of sophistication in the methods and metrics that we use to evaluate them. We contribute to this venture by capitalizing on recent work in cognitive science analyzing response dynamics, which shows that the bearing information processing dynamics have on intended action is also revealed in the motor system. This decidedly “embodied” view suggests that researchers are missing out on potential dependent variables with which to evaluate their models—those associated with the motor response that produces a choice. The current work develops a method for collecting and analyzing such data in the domain of decision making. We first validate this method using widely normed stimuli from the International Affective Picture System (Experiment 1), and demonstrate that curvature in response trajectories provides a metric of the competition between choice options. We next extend the method to risky decision making (Experiment 2) and develop predictions for three popular classes of process model. The data provided by response dynamics demonstrate that choices contrary to the maxim of risk seeking in losses and risk aversion in gains may be the product of at least one “online” preference reversal, and can thus begin to discriminate amongst the candidate models. Finally, we incorporate attentional data collected via eye-tracking (Experiment 3) to develop a formal computational model of joint information sampling and preference accumulation. In sum, we validate response dynamics for use in preferential choice tasks and demonstrate the unique conclusions afforded by response dynamics over and above traditional methods.     

Even better than the real thing: Alternative outcome bias affects decision judgements and decision regret

Three experiments demonstrated that decisions resulting in considerable amounts of profit, but missed alternative outcomes of greater profits, were rated lower in quality and produced more regret than did decisions that returned lesser (or equal) amounts of profit but either did not miss or missed only slightly better alternatives. These effects were mediated by upward counterfactuals and moderated by participants’ orientation to the decision context. That decision evaluations were affected by the availability and magnitude of alternative outcomes rather than the positivity of actual outcomes is counter to the outcome bias effect—a bias in which decisions are rated more positively when they led to more positive outcomes (despite a priori probabilities associated with the decision outcomes). Experiment 3 demonstrated that these effects represent a bias that occurs even when it is clear that the process by which decisions were made followed rational decision processes. This research suggests that when alternative worlds are even better than the desirable outcomes experienced, affect and cognition may be more strongly linked to the magnitude of alternative realities than to obtained outcomes.     

Comparison selection: An approach to the study of consumer judgment and choice

We introduce an alternative perspective on the study of consumer judgment and decision making, which is based on the notion that judgment and choice problems consist of comparisons that decision makers might select. Our new perspective proposes that if we can predict the likelihood that particular comparisons will become focal in a judgment or choice task, we will be able to gain a better understanding of and anticipate the resulting effect. Building on related literatures, we propose that comparison selection is driven by the task's latitude of acceptance (LOA) and comparison fluency (i.e., the overall ease of making that comparison). The task's LOA curve represents the range and concentration of potentially acceptable comparisons, whereas comparison fluency refers to the salience and ease of making the comparison. We illustrate our approach using previously studied problems (e.g., choice, variety seeking, the “jacket and calculator” problem, and contingent valuation) as well as new empirical tests.     

Selective exposure to information and cognitive dissonance

Despite numerous attempts, the selective exposure prediction of Festinger's (A theory of cognitive dissonance. Evanston, Ill.: Row, Peterson, 1957) theory of cognitive dissonance has not been consistently demonstrated. In previous studies, this failure can be attributed to design deficiencies, and other related problems. The present study manipulated dissonance by having subjects write a counterattitudinal essay under conditions of high or low choice. Information in the form of pamphlets and discussion groups was offered to the subjects such that they could choose information that was consonant and dissonant with the decision to write the essay. The information was offered either before or after an attitude measure on the essay topic, as the attitude measure could also be a source of dissonance reduction. The results indicate that the high choice manipulation yielded greater attitude change than the low-choice manipulation. High-choice subjects desired consonant information more and dissonant information less than did low-choice subjects. This effect was found for both measures of information desire (pamphlets and discussion groups). Low-choice subjects who received the attitude questionnaire before the information measures wanted information more than if offered the information before the attitude questionnaire, implying a sensitizing effect produced by the attitude questionnaire for the low-choice subjects. The various effects are discussed as providing support for predictions from Festinger's dissonance theory.