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Of black swans and tossed coins : is the description-experience gap in risky choice limited to rare events?
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Ludvig, Elliot Andrew and Spetch, Marcia Louise (2011) Of black swans and tossed coins : is the description-experience gap in risky choice limited to rare events? PLoS One, Volume 6 (Number 6). Article number e20262. doi:10.1371/journal.pone.0020262
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WRAP_Ludvig_journal.pone.0020262.pdf - Published Version Available under License Creative Commons Attribution. Download (491Kb) | Preview |
Official URL: http://dx.doi.org/10.1371/journal.pone.0020262
Abstract
When faced with risky decisions, people tend to be risk averse for gains and risk seeking for losses (the reflection effect). Studies examining this risk-sensitive decision making, however, typically ask people directly what they would do in hypothetical choice scenarios. A recent flurry of studies has shown that when these risky decisions include rare outcomes, people make different choices for explicitly described probabilities than for experienced probabilistic outcomes. Specifically, rare outcomes are overweighted when described and underweighted when experienced. In two experiments, we examined risk-sensitive decision making when the risky option had two equally probable (50%) outcomes. For experience-based decisions, there was a reversal of the reflection effect with greater risk seeking for gains than for losses, as compared to description-based decisions. This fundamental difference in experienced and described choices cannot be explained by the weighting of rare events and suggests a separate subjective utility curve for experience.
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Subjects: | B Philosophy. Psychology. Religion > BF Psychology | ||||
| Divisions: | Faculty of Science, Engineering and Medicine > Science > Psychology | ||||
| Library of Congress Subject Headings (LCSH): | Risk-taking (Psychology), Decision making | ||||
| Journal or Publication Title: | PLoS One | ||||
| Publisher: | Public Library of Science | ||||
| ISSN: | 1932-6203 | ||||
| Official Date: | June 2011 | ||||
| Dates: |
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| Volume: | Volume 6 | ||||
| Number: | Number 6 | ||||
| Page Range: | Article number e20262 | ||||
| DOI: | 10.1371/journal.pone.0020262 | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Open Access | ||||
| Funder: | Natural Sciences and Engineering Research Council of Canada (NSERC), Alberta Gaming Research Institute (AGRI) | ||||
| Grant number: | 38861 (NSERC) |
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