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What's in a sample? Epistemic uncertainty and metacognitive awareness in risk taking
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Olschewski, Sebastian and Scheibehenne, Benjamin (2024) What's in a sample? Epistemic uncertainty and metacognitive awareness in risk taking. Cognitive Psychology, 149 . 101642. doi:10.1016/j.cogpsych.2024.101642 ISSN 0010-0285.
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Official URL: http://doi.org/10.1016/j.cogpsych.2024.101642
Abstract
In a fundamentally uncertain world, sound information processing is a prerequisite for effective behavior. Given that information processing is subject to inevitable cognitive imprecision, decision makers should adapt to this imprecision and to the resulting epistemic uncertainty when taking risks. We tested this metacognitive ability in two experiments in which participants estimated the expected value of different number distributions from sequential samples and then bet on their own estimation accuracy. Results show that estimates were imprecise, and this imprecision increased with higher distributional standard deviations. Importantly, participants adapted their risk-taking behavior to this imprecision and hence deviated from the predictions of Bayesian models of uncertainty that assume perfect integration of information. To explain these results, we developed a computational model that combines Bayesian updating with a metacognitive awareness of cognitive imprecision in the integration of information. Modeling results were robust to the inclusion of an empirical measure of participants' perceived variability. In sum, we show that cognitive imprecision is crucial to understanding risk taking in decisions from experience. The results further demonstrate the importance of metacognitive awareness as a cognitive building block for adaptive behavior under (partial) uncertainty. [Abstract copyright: Copyright © 2024 The Author(s). Published by Elsevier Inc. All rights reserved.]
Item Type: | Journal Article | ||||||||
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Divisions: | Faculty of Science, Engineering and Medicine > Science > Psychology Faculty of Social Sciences > Warwick Business School |
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SWORD Depositor: | Library Publications Router | ||||||||
Journal or Publication Title: | Cognitive Psychology | ||||||||
Publisher: | Elsevier | ||||||||
ISSN: | 0010-0285 | ||||||||
Official Date: | March 2024 | ||||||||
Dates: |
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Volume: | 149 | ||||||||
Article Number: | 101642 | ||||||||
DOI: | 10.1016/j.cogpsych.2024.101642 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Date of first compliant deposit: | 3 May 2024 | ||||||||
Date of first compliant Open Access: | 3 May 2024 |
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