Information search and mental representation in risky decision making: The advantages first principle

In three experiments the problem is investigated how people identify early in the decision process those alternatives that are worthwhile to be examined in more detail. We assume that decision makers employ the Advantages first Principle: They first search for information about positive outcomes and then focus their information search (e.g., for negative consequences or for risk defusing operators) on those alternatives that appear attractive after this initial evaluation. In Experiment 1 (120 participants), initial information about consequences was varied for eight alternatives (no information, positive consequences, negative, or mixed for four alternatives). In all conditions, the great majority of participants followed both aspects of the Advantages first Principle. In Experiment 2, 60 participants decided in two quasi‐realistic scenarios with two alternatives each. Initial information was presented so that one alternative had better positive consequences, worse negative consequences, or both. In all conditions, more information was searched for in the initially better alternative. In Experiment 3 (20 participants) the Advantages first Principle was not only confirmed for a scenario but also for choices in traditional gambling tasks with two and eight alternatives, respectively. Participants could win or lose real money. Copyright © 2010 John Wiley & Sons, Ltd.     

Successful or unsuccessful search for risk defusing operators: Effects on decision behaviour

In experiments with quasi-realistic risky scenarios instead of gambles, decision makers are less interested in probability information. Often, they actively search for a risk defusing operator (RDO; an action to be performed in addition to a specific alternative and expected to decrease the risk involved). Examples in daily life are insurance and vaccination. In our experiment, the central independent variable was the successful or unsuccessful RDO search. The central dependent variables were choices and information search behaviour. In order to get information about the applied heuristics, a concurrent Thinking Aloud procedure was employed in addition to the method of Active Information Search. Eighty subjects made a choice in two risky scenarios. The findings confirm that the successful search for an RDO for one of the alternatives is an excellent predictor of choice. If the subject does not search for an RDO or the search is unsuccessful, MAXIMIN was the most frequent heuristic.     

Sensitivity to reward and risky driving,risky decision making,and risky health behaviour: A literature review

Young driver road safety has persisted as a global problem for decades, despite copious and diverse intervention. Recently the influence in reward sensitivity, which refers to the individual’s personal sensitivity to rewards, has received attention in health-related research, including more generally through decision making in risky circumstances, and in risky driving behaviour specifically. As such, a literature review and synthesis of the literature regarding reward sensitivity in relation to risky driving, risky decision making, and risky health behaviour, with a focus on literature in which adolescents and young adults feature, is timely. Thirty-one papers were identified, and the literature revealed that young drivers with greater reward sensitivity engage in more risky driving behaviours including speeding, crashes and traffic violations; and that individuals with greater reward sensitivity engage in more risky decision making and other risky health-related behaviours (such as drinking and drug use). Adolescents and young adults exhibit heightened sensitivity to rewards in the presence of peers, which has considerable implications for young driver road safety as research consistently demonstrates that carrying peer passengers places all vehicle occupants at greater risk of being involved in a road crash. Consideration of the influence of reward sensitivity in young driver road safety, and other adolescent/young adult health-related safety, appears to be a promising avenue of intervention, with gain-framed messages more likely to be accepted by young drivers with greater reward sensitivity. Future research in jurisdictions other than Australia and Europe will increase our understanding of the influence of reward sensitivity, and exploration of the differential impacts of reward-responsiveness and fun-seeking specifically are warranted.     

Emotion regulation and risk taking: Predicting risky choice in deliberative decision making

Only very recently has research demonstrated that experimentally induced emotion regulation strategies (cognitive reappraisal and expressive suppression) affect risky choice (e.g., Heilman et al., 2010). However, it is unknown whether this effect also operates via habitual use of emotion regulation strategies in risky choice involving deliberative decision making. We investigated the role of habitual use of emotion regulation strategies in risky choice using the “cold” deliberative version of the Columbia Card Task (CCT; Figner et al., 2009). Fifty-three participants completed the Emotion Regulation Questionnaire (ERQ; Gross & John, 2003) and—one month later—the CCT and the PANAS. Greater habitual cognitive reappraisal use was related to increased risk taking, accompanied by decreased sensitivity to changes in probability and loss amount. Greater habitual expressive suppression use was related to decreased risk taking. The results show that habitual use of reappraisal and suppression strategies predict risk taking when decisions involve predominantly cognitive-deliberative processes.     

The origins and function of the reference point in risky group decision making the case of the Cuban missile crisis

This case study explores reference level effects on group decision making during the Cuban missile crisis of 1962. The group is composed of American President John F. Kennedy and his advisers. The results are consistent with much experimental evidence showing that reference levels play an important role in determining preferences. The results also extend the notion of reference-dependent risky choice to the group level, where the group consists of seasoned experts who each have a different role to play within the group and who are dealing with an issue of great importance.     

Individual differences in need for cognition and decision making in the Iowa Gambling Task

Differences in decision making between individuals differing in Need for Cognition (NFC) are examined using the Iowa Gambling Task (IGT). Previous work using normative one time decisions suggests that individual low in NFC process gains and losses differently than those high in NFC and are more susceptible to decision biases. The IGT is a popular laboratory task that involves making risky decisions from experience involving both gains and losses. In the first experiment, low NFC participants performed significantly worse than the high NFC participants. A second experiment designed to examine the nature of these differences provides evidence that low NFC participants place more importance on gains as opposed to losses when performing the IGT. Results are discussed in light of previous work suggesting that low NFC participants place more importance on losses in mixed outcome decisions.     

Information distortion in self-other decision making

In both organizational and social arenas, individuals make decisions for themselves and for other individuals. But research in decision making has provided little input into whether or how these decisions are psychologically different. In this paper, I propose that decisions—depending on whom they are for—vary according to the extent of information distortion, such that, individuals who choose for themselves demonstrate more postdecisional distortion, yet less predecisional distortion than individuals who choose on behalf of others. To test this hypothesis, participants in an experiment made a decision between two restaurants. Attributes about each restaurant were presented sequentially, and preferences were measured following each attribute. As expected, participants who chose for themselves experienced more postdecisional distortion. However, among participants who chose on behalf of others, greater distortion of predecisional attribute information was observed. These findings shed light on the differences in self-other decision making, as well as on research concerning information distortion.     

Risky decision making and cognitive flexibility among online sports bettors in Nigeria

Online sports betting is a popular recreational activity in Nigeria. Like other forms of gambling, risk of pathological progression exists for gamblers who continue betting despite severe financial and psychosocial consequences. In the present study, we examined whether this population of gamblers shows deficits in decision making and cognitive flexibility that have been documented in Western gambling populations. Thirty-six online sports bettors and 42 non-gambling participants completed a version of the Iowa gambling task (IGT) and an established set-shifting task for the assessment of cognitive flexibility. The two groups did not differ significantly in the selection of disadvantageous decks on the IGT. In contrast, sports bettors committed significantly more errors on the set-shifting task than non-gambling control participants. As this performance deficit was not specific to trials requiring a set shift, it most likely resulted from gambling-related changes in general cognitive or motivational abilities that are required to successfully complete challenging mental tasks. While our results illustrate that findings from Western populations cannot automatically be generalised to other contexts, it should be noted that we focused on only one particular type of gambling and included mostly participants with mild gambling-related problems.     

Money does not stink: Using unpleasant odors as stimulus material changes risky decision making

Odors are strong elicitors of affect, and they play an important role in guiding human behavior, such as avoiding fire or spoiled food. However, little is known about how risky decision making changes when stimuli are olfactory. We investigated this question in an experimental study of risky decision making with unpleasant odors and monetary losses in a fully incentivized task with real outcomes. Odor and monetary decisions were matched so that monetary losses corresponded to the amount of money participants were willing to pay to avoid smelling an odor. Hierarchical Bayesian analyses using prospect theory show that participants were less sensitive to probabilities when gambling with odors than when gambling with money. These results highlight the importance of taking the sensory modality into account when studying risky decision making.     

The role of feedback in shaping responses to risky road scenarios: Evidence from electrodermal activity

When faced with hazardous driving situations, rapid and effective risk perception and decision-making processes are of crucial importance for avoiding crashes. In these cases, the processes are accompanied and influenced by underlying psychophysiological mechanisms such as electrodermal activity (EDA) modulations. The present work aims to assess the psychophysiological mechanisms underlying participants’ risk perception and decision-making when facing risky road scenarios, as correlated to the feedback role in modulating participants’ behavior. Study 1 (n = 32) explores the behavioral effects of administering a contingent feedback in a decision (decision-making) and an evaluation (risk perception) task in response to a set of risky and not risky images. The behavioral data reveal an effect on the participants’ probability of response, independently from the type of image presented, when the feedback was administered. In the decision task, the effect is accompanied by a change in the amplitude and percentage of the skin conductance responses (SCRs), which are moderated by block of trials. Study 2 (n = 44) better assesses the role of task and block on participants’ physiological activation, as measured by EDA signal. The results show an increase in psychophysiological activation when the feedback is delivered, in the first part of the tasks, both in terms of SCRs amplitude and percentage to the presented road scenarios, followed by a decrease in the second part of the tasks. Moreover, this effect is more evident in the decision task than the evaluation task. These findings suggest that the role exerted by feedback when facing risky traffic images may be described as based on an associative process that, once the correct response has been learned, tends to be reduced as it becomes automatic. Overall, the results of the two studies represent an important step toward the development of training programs aimed at promoting safer behaviors in risky driving contexts.     

Corporate foreign exchange risk management: A study in decision making under uncertainty

This paper examines the management of foreign exchange risk in multinational corporations in light of the conclusions of previous empirical and theoretical investigations into decision making under uncertainty. Cognitive perceptions of risk and uncertainty are shown to underlie the hedging decisions made by corporate treasury managers, which are often demonstrably sub-optimal in a Bayesian expected utility framework. The findings suggest that simple principal-agent approaches to explaining seemingly sub-optimal corporate risk management preferences are inadequate inasmuch as they fail to account for the markedly different perspectives on risk and uncertainty taken by financial economists (qua economists) and corporate financial risk managers.     

Gambling for Gatorade: risk-sensitive decision making for fluid rewards in humans

Determining how both humans and animals make decisions in risky situations is a central problem in economics, experimental psychology, behavioral economics, and neurobiology. Typically, humans are risk seeking for gains and risk averse for losses, while animals may display a variety of preferences under risk depending on, amongst other factors, internal state. Such differences in behavior may reflect major cognitive and cultural differences or they may reflect differences in the way risk sensitivity is probed in humans and animals. Notably, in most studies humans make one or a few choices amongst hypothetical or real monetary options, while animals make dozens of repeated choices amongst options offering primary rewards like food or drink. To address this issue, we probed risk-sensitive decision making in human participants using a paradigm modeled on animal studies, in which rewards were either small squirts of Gatorade or small amounts of real money. Possible outcomes and their probabilities were not made explicit in either case. We found that individual patterns of decision making were strikingly similar for both juice and for money, both in overall risk preferences and in trial-to-trial effects of reward outcome on choice. Comparison with decisions made by monkeys for juice in a similar task revealed highly similar gambling styles. These results unite known patterns of risk-sensitive decision making in human and nonhuman primates and suggest that factors such as the way a decision is framed or internal state may underlie observed variation in risk preferences between and within species.     

A dual-process approach to health risk decision making: The prototype willingness model

Although dual-process models in cognitive, personality, and social psychology have stimulated a large body of research about analytic and heuristic modes of decision making, these models have seldom been applied to the study of adolescent risk behaviors. In addition, the developmental course of these two kinds of information processing, and their relation to the development of self-regulation are not well understood at this time. The current paper reviews what leading dual-process models have to say about the development of analytic and heuristic decision making, and their implications for adolescent risk behavior. In addition, it reviews research on the prototype willingness model of adolescent decision making—a dual-process model designed specifically to address non-intentional, but volitional adolescent risk behavior. It also discusses the implications of dual-process models for intervention research.     

Focus induced tunnel vision in managerial judgment and decision making: The peril and the antidote

Managers often must assess singular strategic options. Four studies of such assessments demonstrate a tunnel vision effect: Focal managerial options often are favored in an evidentially unjustifiable manner. Study 1 concerns new product development, and demonstrates that a prototype that has become focal tends to be judged overly favorably, and is chosen for launch with unwarranted enthusiasm. Study 2 shows that this tunnel vision effect generalizes to judgments and decisions about general strategy. Study 3 focuses on the information search patterns underlying the effect, and Study 4 replicates the tunnel vision effect among experienced executives, and demonstrates the utility of a debiasing procedure. Data in all of the studies implicate selective processing as the driver of the tunnel vision effect, and further understanding of how selective processing affects choice. Several alternative operationalizations of the empirically tested debiasing procedure are discussed.     

Peer influence on risk taking, risk preference, and risky decision making in adolescence and adulthood: an experimental study

In this study, 306 individuals in 3 age groups--adolescents (13-16), youths (18-22), and adults (24 and older)--completed 2 questionnaire measures assessing risk preference and risky decision making, and 1 behavioral task measuring risk taking. Participants in each age group were randomly assigned to complete the measures either alone or with 2 same-aged peers. Analyses indicated that (a) risk taking and risky decision making decreased with age; (b) participants took more risks, focused more on the benefits than the costs of risky behavior, and made riskier decisions when in peer groups than alone; and (c) peer effects on risk taking and risky decision making were stronger among adolescents and youths than adults. These findings support the idea that adolescents are more inclined toward risky behavior and risky decision making than are adults and that peer influence plays an important role in explaining risky behavior during adolescence.     

Who’s bringing the donuts: The role of affective patterns in group decision making

Two studies examined how intragroup affective patterns influence groups’ pervasive tendency to ignore the unique expertise of their members. Using a hidden profile task, Study 1 provided evidence that groups with at least one member experiencing positive affect shared more unique information than groups composed entirely of members experiencing neutral affect. This occurred because group members experiencing positive affect were more likely to initiate unique information sharing, as well as information seeking. Study 2 built upon this base by showing that confidence mediates the relationship between positive affect and the initiation of unique information sharing. Additionally, Study 2 investigated the role of negative affect in group decision making and how negative and positive affect concurrently influence decision making when groups are composed of members experiencing each. The results are discussed in terms of the role affect plays in influencing group behavior and the resultant importance of investigating specific affective patterns.     

风险决策的概率权重偏差：心理机制与优化策略

概率权重偏差指人对事件发生的主观概率估计与客观概率的差异。它影响投资、投保、医患沟通等方面。“重结果轻概率”的非补偿性策略和参照点诱发的情绪波动会引发概率权重偏差; 改变“概率”的描述形式、“结果”的情绪体验、“损益”的参照点、风险的心理距离等可调整权重偏差、优化决策。未来需深究权重偏差的适用情境、机制关联及偏差辨别等问题。     

The relationship between indecisiveness and eye movement patterns in a decision making informational search task

Indecisiveness is a trait‐related general tendency to experience decision difficulties across a variety of situations, leading to decision delay, worry, and regret. Indecisiveness is proposed (Rassin, 2007) to be associated with an increase in desire for information acquisition and reliance on compensatory strategies—as evidenced by alternative‐based information search—during decision making. However existing studies provide conflicting findings. We conducted an information board study of indecisiveness, using eye tracking methodology, to test the hypotheses that the relationship between indecisiveness and choice strategy depends on being in the early stage of the decision making process, and that it depends on being in the presence of an opportunity to delay choice. We found strong evidence for the first hypothesis in that indecisive individuals changed shift behavior from the first to the second half of the task, consistent with a move from greater to lesser compensatory processing, while the shift behavior of decisive individuals suggested lesser compensatory processing over the whole task. Indecisiveness was also related to time spent viewing attributes of the selected course, and to time spent looking away from decision information. These findings resolve past discrepancies, suggest an interesting account of how the decision process unfolds for indecisive versus decisive individuals, and contribute to a better understanding of this tendency. Copyright © 2009 John Wiley & Sons, Ltd.     

The roles of planning,learning, and mental models in repeated dynamic decision making

Repeated search and decision making is a common consumer activity that should benefit from advanced planning. In three simulated shopping experiments, we find that people often fail to plan spontaneously or, when they do plan, do not use an appropriate mental model of the search problem. We also manipulate the mental models used by subjects and find that while our manipulation successfully encourages the development of appropriate mental models and improves performance when search costs are low, it does not result in the type of sophisticated mental model required to change strategies based on increased search costs. Finally, we show that the benefits of planning generalize to real world shopping behavior in a field experiment.