Choice behavior in a sequential decision-making task

Many day-to-day decisions involving risk are based on a person's memory for the past sequence of outcomes. The study of sequential decision making investigates how individuals use information about the past sequence of outcomes in order to make risky decisions. In this article, a random walk decision model called the confidence strength model is evaluated which was designed to describe the cognitive processes individuals use to combine sequential information provided by event patterns with payoff information in a sequential decision-making task. Two related experiments are reported which were designed to test various assumptions of the confidence strength model. The particular task used to study sequential decision making was the differential payoff paradigm in which the decision maker was required to predict which of two uncertain events would occur on each trial. Following each choice, feedback was presented in the form of differential monetary payoffs which were contingent on the alternative-event combination occurring on that trial. Payoffs were manipulated by varying the loss for incorrect decisions associated with each alternative, and sequential information was manipulated by constructing event sequences with a fixed distribution of run lengths within each block of trials. The response measures included the proportion of trials one alternative was chosen over another and also the average choice speed for each alternative. The main theoretical result was that the confidence strength model provided a good overall fit to the pattern of results for the choice proportion measure, and also accounted for a majority fo the findings obtained from the choice speed measures, although there were some minor exceptions. The confidence strength model provided a better account of the present results and previous research than several alternative choice models that were considered.