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Decision by sampling: the role of the decision environment in risky choice

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Stewart, Neil, 1974-. (2009) Decision by sampling: the role of the decision environment in risky choice. Quarterly Journal of Experimental Psychology, Vol.62 (No.6). pp. 1041-1062. ISSN 1747-0218

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Official URL: http://dx.doi.org/10.1080/17470210902747112

Abstract

Decision by sampling (DbS) is a theory about how our environment shapes the decisions that we make. Here, I review the application of DbS to risky decision making. According to classical theories of risky decision making, people make stable transformations between outcomes and probabilities and their subjective counterparts using fixed psychoeconomic functions. DbS offers a quite different account. In DbS, the subjective value of an outcome or probability is derived from a series of binary, ordinal comparisons with a sample of other outcomes or probabilities from the decision environment. In this way, the distribution of attribute values in the environment determines the subjective valuations of outcomes and probabilities. I show how DbS interacts with the real-world distributions of gains, losses, and probabilities to produce the classical psychoeconomic functions. I extend DbS to account for preferences in benchmark data sets. Finally, in a challenge to the classical notion of stable subjective valuations, I review evidence that manipulating the distribution of attribute values in the environment changes our subjective valuations just as DbS predicts.

Item Type:	Journal Article
Subjects:	B Philosophy. Psychology. Religion > BF Psychology
Divisions:	Faculty of Science > Psychology
Library of Congress Subject Headings (LCSH):	Decision making -- Testing, Risk-taking (Psychology) -- Testing, Psychology, Experimental -- Research -- Statistical methods
Journal or Publication Title:	Quarterly Journal of Experimental Psychology
Publisher:	Taylor & Francis
ISSN:	1747-0218
Date:	June 2009
Volume:	Vol.62
Number:	No.6
Number of Pages:	22
Page Range:	pp. 1041-1062
Identification Number:	10.1080/17470210902747112
Status:	Peer Reviewed
Access rights to Published version:	Open Access
Funder:	Economic and Social Research Council (Great Britain) (ESRC)
Grant number:	RES-062-23-0952 (ESRC)
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URI:	http://wrap.warwick.ac.uk/id/eprint/706