Investigating the roots of the favourite–longshot bias: an analysis of decision making by supply‐ and demand‐side agents in parallel betting markets

This paper offers new insights into the behavioural origins of the ‘favourite–longshot’ bias — an established feature of betting markets, whereby longshots win less often than the subjective probabilities imply and favourites more often. A number of alternative explanations has been offered for this phenomenon but the main debate focuses on whether it is caused by the behaviour of those supplying betting markets (bookmakers) or of the demand‐side agents in these markets (bettors) . This study analyses a new data source which offers detailed information for a large sample of recent UK horseraces on decision‐making behaviour within the parimutuel and the parallel bookmaker‐based betting markets. The results offer strong evidence for the existence of the ‘favourite–longshot’ bias in bookmaker‐based markets, with a corresponding absence of such an effect in the parimutuel case. These results offer support for the view that the origins of the ‘favourite–longshot’ bias lie principally in the decisions of bookmakers rather than in the decisions of bettors. Copyright © 2000 John Wiley & Sons, Ltd.     

Hemispheric interaction,task complexity,and emotional valence: Evidence from naturalistic images

Two experiments extend the ecological validity of tests of hemispheric interaction in three novel ways. First, we present a broad class of naturalistic stimuli that have not yet been used in tests of hemispheric interaction. Second, we test whether probable differences in complexity within the class of stimuli are supported by outcomes from measures of hemispheric interaction. Third, we use a procedure that presents target stimuli at fixation rather than at a lateralized location in order to more closely approximate normal viewing behavior.     

Calibration of Subjective Probability Judgments in a Naturalistic Setting

Results of previous calibration studies are used to identify features of the decision maker and the decision environment which might be expected to result in good calibration. Racetrack bettors and, in particular, the UK parimutuel betting market are identified as possessing such characteristics. In order to explore calibration in this setting, an analysis is undertaken of bets placed on 19,396 horses. A close correlation is observed between the subjective probability judgments of horses' success, implicit in the bettors' wagering activities, and the objective probability of success of the horses concerned. Explanations for the results are offered in terms of characteristics of racetrack bettors and the naturalistic setting, with particular reference to the operation of the betting market. The results contribute to an emergent school of thought which advocates naturalistic enquiry as a complement to laboratory-based experiments in further developing the understanding of decision making.     

Episodic chasing in pathological gamblers using the Iowa gambling task

"Chasing ones losses" is a key symptom among pathological gamblers (PGs). This study focuses on quantitative differences in episodic chasing (i.e., sequences of disadvantageous decisions within a single gambling session) between PGs and non-pathological gamblers (NPGs). We compared 61 PGs and 39 NPGs on the Iowa Gambling Task (IGT) and the Zuckerman Sensation Seeking Scale (SSS). The PGs showed significantly more chasing and had significantly poorer decision-making strategies than NPGs, particularly among males (F = 4.52, p < 0.05). Random players were significantly less sensation seeking than advantageous and disadvantageous (i.e., chasing) players, but there was no interaction with group or gender. The results suggest that quantifiable within-session gambling behavior holds important implications for detecting underlying vulnerabilities to gambling pathology.     

医疗风险决策的自我他人差异及其影响因素

从心理学的层面梳理医疗风险决策自我他人差异的表现及影响因素,狭义的医疗风险是患者在医疗服务的过程中因为医疗过失导致的损害等不安全事件,而广义的医疗风险包含了患者受到的伤害和整个医疗卫生体系受到的损失。在实际的医疗决策中,医生、家属和患者三方通常会做出不同的决策并且伴随着其立场的合理性,决策时也会受到决策框架和医疗决策模式等多方面的影响,可以采用解释水平理论、社会价值理论和双系统理论对不同决策主体之间的决策差异进行解释。未来可以从真实的医疗情境、个人特质、文化差异等方面进行深入研究。

     

Emotion,Decision, and Risk: Betting on Gambles versus Betting on People

We examined the effects of two emotions, fear and anger, on risk‐taking behavior in two types of tasks: Those in which uncertainty is generated by a randomizing device (“lottery risk”) and those in which it is generated by the uncertain behavior of another person (“person‐based risk”). Participants first completed a writing task to induce fear or anger. They then made choices either between lotteries (Experiment 1) or between actions in risky two‐person decisions (Experiments 2 and 3). The experiments involved substantial real‐money payoffs. Replicating earlier studies (which used hypothetical rewards), Experiment 1 showed that fearful participants were more risk‐averse than angry participants in lottery‐risk tasks. However—the key result of this study—fearful participants were substantially less risk‐averse than angry participants in a two‐person task involving person‐based risk (Experiment 2). Experiment 3 offered options and payoffs identical to those of Experiment 2 but with lottery‐type risk. Risk‐taking returned to the pattern of Experiment 1. The impact of incidental emotions on risk‐taking appears to be contingent on the class of uncertainty involved. For lottery risk, fear increased the frequency of risk‐averse choices and anger reduced it. The reverse pattern was found when uncertainty in the decision was person‐based. Further, the effect was specifically on differences in willingness to take risks rather than on differences in judgments of how much risk was present. The impact of different emotions on risk‐taking or risk‐avoiding behavior is thus contingent on the type, as well as the degree, of uncertainty the decision maker faces. Copyright © 2010 John Wiley & Sons, Ltd.     

How drivers adapt their behaviour to changes in task complexity: The role of secondary task demands and road environment factors

The present study investigates the impact of different sources of task complexity such as driving demands and secondary task demands on driver behaviour. Although much research has been dedicated to understanding the impact of secondary task demands or specific road traffic environments on driving performance, there is little information on how drivers adapt their behaviour to their combined presence. This paper aims to describe driver behaviour while negotiating different sources of task complexity, including mobile phone use while driving (i.e., calling and texting) and different road environments (i.e., straight segments, curves, hills, tunnels, and curves on hills). A driving simulator experiment was conducted to explore the effects of different road scenarios and different types of distraction while driving. The collected data was used to estimate driving behaviour through a Generalized Linear Mixed Model (GLMM) with repeated measures. The analysis was divided into two phases. Phase one aimed to evaluate driver performance under the presence and absence of pedestrians and oncoming traffic, different lanes width and different types of distraction. The second phase analysed driver behaviour when driving through different road geometries and lane widths and under different types of distraction. The results of the experiment indicated that drivers are likely to overcorrect position in the vehicle lane in the presence of pedestrians and oncoming traffic. The effect of road geometry on driver behaviour was found to be greater than the effect of mobile phone distraction. Curved roads and hills were found to influence preferred speeds and lateral position the most. The results of this investigation also show that drivers under visual-manual distraction had a higher standard deviation of speed and lateral position compared to the cognitive distraction and the non-distraction condition.     

Risk Taking in Adolescence: New Perspectives From Brain and Behavioral Science

ABSTRACT— Trying to understand why adolescents and young adults take more risks than younger or older individuals do has challenged psychologists for decades. Adolescents' inclination to engage in risky behavior does not appear to be due to irrationality, delusions of invulnerability, or ignorance. This paper presents a perspective on adolescent risk taking grounded in developmental neuroscience. According to this view, the temporal gap between puberty, which impels adolescents toward thrill seeking, and the slow maturation of the cognitive-control system, which regulates these impulses, makes adolescence a time of heightened vulnerability for risky behavior. This view of adolescent risk taking helps to explain why educational interventions designed to change adolescents' knowledge, beliefs, or attitudes have been largely ineffective, and suggests that changing the contexts in which risky behavior occurs may be more successful than changing the way adolescents think about risk.     

Fast and frugal heuristics and naturalistic decision making: a review of their commonalities and differences

Both the fast and frugal heuristics (FFHs) and the naturalistic decision making (NDM) research programmes have identified important areas of inquiry previously neglected in the traditional study of human judgment and decision making, and have greatly contributed to the understanding of people's real-world decision making under environmental constraints. The two programmes share similar theoretical arguments regarding the rationality, optimality, and role of experience in decision making. Their commonalities have made them appealing to each other, and efforts have been made, by their leading academics, to promote synergy and integration. However, there has been little progress towards this during the last decade. This paper seeks to address this gap by seeking to better understand their commonalities and differences. To do so, literature relating to the two programmes is reviewed. The findings of the review indicated that an integration of the two could enhance FFHs' field research in applied settings, facilitate its investigation on boundary conditions of people's decision strategy selection, enable NDM to embrace emerging research opportunities in the age of big data, as well as permit each programme to enlighten the research topics and to validate the research findings of the other.     

Evidence for Implicit Risk: Delay Facilitates the Processing of Uncertainty

Humans and other animals discount the value of rewards over time. One explanation for this is that delayed rewards may be less certain than immediate rewards, what has been referred to as the implicit risk hypothesis. Although this explanation is widely accepted, little research has directly assessed the validity of the implicit risk hypothesis. In the current study, we present two experiments in which participants made decisions about rewards involving both delay and uncertainty. By manipulating the order in which information was presented, we were able to investigate whether delay information facilitates beliefs about uncertainty and vice versa. It was found that participants were more likely to prefer larger, delayed rewards when information about delay was presented before information about uncertainty than when the information was presented in the opposite order. Additionally, we describe a process model that implements the implicit risk hypothesis and show that it is consistent with the observed patterns of data. These results support the implicit risk hypothesis and suggest that information about delay facilitates the processing of information about uncertainty. Copyright © 2015 John Wiley & Sons, Ltd.     

Losses Induce Consistency in Risk Taking Even Without Loss Aversion

It is posited that because of the attentional effect of losses, individuals would show more behavioral consistency in risk‐taking tasks with losses, even in the absence of loss aversion. In two studies, the consistency of risky choices across different experience‐based tasks was evaluated for gain, loss, and mixed (gain loss) tasks. In both studies, losses facilitated the consistency across tasks: the correlation between risk‐taking choices in different tasks increased when the tasks involved frequent losses. Study 2 also showed a positive effect of losses on temporal consistency. Losses increased the correlation between risk‐taking levels across two sessions that were 45 days apart. Also in Study 2, losses induced consistency between experiential risk‐taking choices and self‐reported ratings of risky behavior. In both studies, the positive effect of losses on consistency was observed even when the average participant did not exhibit loss aversion. Taken together, the results indicate that losses increase the consistency of risk‐taking behavior and suggest that this is due to the effect of losses on attention. Copyright © 2011 John Wiley & Sons, Ltd.     

Working Memory in Children Predicts Performance on a Gambling Task

ABSTRACT. The authors investigated whether working memory (WM) plays a significant role in the development of decision making in children, operationalized by the Children's Gambling Task (CGT). A total of 105 children aged 6–7, 8–9, and 10–11 years old carried out the CGT. Children aged 6–7 years old were found to have a lower performance than older children, which shows that the CGT is sensitive to participant's age. The hypothesis that WM plays a significant role in decision making was then tested following two approaches: (a) an experimental approach, comparing between groups the performance on the CGT in a control condition (the CGT only was administered) to that in a double task condition (participants had to carry out a recall task in addition to the CGT); (b) an interindividual approach, probing the relationship between CGT performance and performance on tasks measuring WM efficiency. The between-groups approach evidenced a better performance in the control group. Moreover, the interindividual approach showed that the higher the participants’ WM efficiency was, the higher their performance in the CGT was. Taken together, these two approaches yield converging results that support the hypothesis that WM plays a significant role in decision making in children.     

Problem decomposability as a factor in complexity of the dimensional change card sort task

According to cognitive complexity and control (CCC) theory complexity depends on number of levels of a hierarchy of rules. According to relational complexity (RC) theory complexity is a function of the number of related variables in the task, and the most difficult tasks are those in which there is a constraint on decomposition into simpler subtasks. One hundred and twenty, 3–6-year old children were tested on the standard dimensional change card sort (DCCS) task, or a modified version, the DecompDCCS, in which the dimensions could be decomposed into subtasks. The standard version requires two levels of a hierarchy to be processed, and is ternary relational according to RC theory, whereas the subtasks of the DecompDCCS are binary relational. The DecompDCCS was easier than the DCCS for 3–4 year-olds, but all 5–6 year-olds succeeded on both. The results indicate that decomposability into simpler subtasks, as suggested by RC theory, is a factor in difficulty of DCCS. The role of decomposability in other tasks that are persistently difficult for young children is discussed.     

Effects of ego-depletion on choice behaviour in a multi-attribute decision task

When a choice has to be made between two options and decision-relevant information about the options is completely available, the Take-The-Best (TTB) heuristic only considers the most important information that discriminates between the options and bases its choice on it. Choices in line with TTB thus allow a decision maker to save time and effort, and they may become more likely therefore under conditions of limited self-control strength (ego-depletion). Ego-depletion was manipulated prior to making a series of choices in a multi-attribute decision task. Choices could have been in line with either TTB or more effortful compensatory decision strategies. As predicted, compared with non-depleted participants, ego-depleted participants were more likely to make TTB-consistent choices.     

Demystifying the role of emotion in behaviour: toward a goal-directed account

ABSTRACT

The paper sketches the historical development from emotion as a mysterious entity and the source of maladaptive behaviour, to emotion as a collection of ingredients and the source of also adaptive behaviour. We argue, however, that the underlying mechanism proposed to take care of this adaptive behaviour is not entirely up for its task. We outline an alternative view that explains so-called emotional behaviour with the same mechanism as non-emotional behaviour, but that is at the same time more likely to produce adaptive behaviour. The phenomena that were initially seen as requiring a separate emotional mechanism to influence and cause behaviour can also be explained by a goal-directed mechanism provided that more goals and other complexities inherent in the goal-directed process are taken into account.     

What a Feeling: The Role of Immediate and Anticipated Emotions in Risky Decisions

The risk‐as‐feelings hypothesis argues that many risky decisions are not only predicted by anticipated emotions, as most consequentialistic decision making theories would presume, but also by immediate emotions. Immediate emotions refer to the “hot” visceral feelings people feel as they contemplate a specific decision option at the cusp of making a decision, whereas anticipated emotions are those emotions that people forecast that they will feel once they experience possible consequences of that decision. Four studies focused on the role of both types of emotions in decisions under risk and uncertainty. Decisions were substantively predicted by immediate emotional states beyond anticipated emotions or the subjective probability attached to outcomes. Thus, risky choices may be prompted, in part, by how people feel about the “riskless” portion of the decision—specifically, the various decision options they are contemplating—rather than the potential outcomes those options may produce. Copyright © 2011 John Wiley & Sons, Ltd.     

Counterfactual Evaluation of Outcomes in Social Risk Decision-Making Situations: The Cognitive Developmental Paradox Revisited

We report a study that examined the existence of a cognitive developmental paradox in the counterfactual evaluation of decision-making outcomes. According to this paradox adolescents and young adults could be able to apply counterfactual reasoning and, yet, their counterfactual evaluation of outcomes could be biased in a salient socio-emotional context. To this aim, we analyzed the impact of health and social feedback on the counterfactual evaluation of outcomes in a laboratory decision-making task involving short narratives with the presence of peers. Forty risky (e.g., taking or refusing a drug), forty neutral decisions (e.g., eating a hamburger or a hotdog), and emotions felt following positive or negative outcomes were examined in 256 early, mid- and late adolescents, and young adults, evenly distributed. Results showed that emotional ratings to negative outcomes (regret and disappointment) but not to positive outcomes (relief and elation) were attenuated when feedback was provided. Evidence of development of cognitive decision-making capacities did also exist, as the capacity to perform faster emotional ratings and to differentially allocate more resources to the elaboration of emotional ratings when no feedback information was available increased with age. Overall, we interpret these findings as challenging the traditional cognitive developmental assumption that development necessarily proceeds from lesser to greater capacities, reflecting the impact of socio-emotional processes that could bias the counterfactual evaluation of social decision-making outcomes.     

The impact of task complexity on information use in multi-attribute decision making

This study presents a process analysis of multi-attribute decision making. The decision problems concerned the selection of the most suitable candidate for a job opening. The problems varied in terms of complexity, i.e. the number of candidates and the number of attributes used to describe these alternatives. Results show that with an increasing number of alternatives, subjects (N = 48) used fewer attributes for the evaluation of alternatives, and made, on average, less references to the alternatives. The type of judgment most often used was absolute dimensional (comparison of an attribute to an absolute standard) and was used more often at the beginning than toward the end of the decision process. Overall, judgments were predominantly positive. The percentage of positive judgments decreased with increasing complexity, and toward the end of the decision process. Significantly more judgments, particularly positive ones, concerned the finally chosen alternative as compared to the rest of the alternatives. Finally, analysis of subjects' usage of decision rules revealed that increasing the number of alternatives resulted in an increasing use of elimination strategies. Implications of these findings for the design of decision aids will be discussed.     

Risk and rationality: the influence of decision domain and perceived outcome control on managers' high‐risk decisions

The issue of when managers will undertake different forms and amounts of risk in their new business creation decisions is still not fully understood. To address one facet of this issue, this paper advances the proposition that decision domain and perceived outcome control interact to impact managers' new‐product introduction decisions. Employing a causal method, a nested experimental design and indicators of risk's probability of loss and magnitude of loss elements, the study's results demonstrate that the manager's level of perceived outcome control combines with decision domain to determine subsequent levels of risk taking that are specific to each element of risk. Implications for theory, including prospect theory, and practice, especially firms wanting to pursue today's high‐risk new‐economy based initiatives, are discussed. Copyright © 2002 John Wiley & Sons, Ltd.