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How Affect Impacts Risky Choice: Phenomena, Mechanisms, and Practical Implications

English title How Affect Impacts Risky Choice: Phenomena, Mechanisms, and Practical Implications
Applicant Pachur Thorsten
Number 125047
Funding scheme Project funding (Div. I-III)
Research institution Cognitive and Decision Sciences Fakultät für Psychologie Universität Basel
Institution of higher education University of Basel - BS
Main discipline Psychology
Start/End 01.06.2009 - 31.05.2012
Approved amount 175'480.00
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Keywords (9)

behavioral decision making; affect; risky choice; process tracing; adult decision making; decision making; risk; probability; heuristics

Lay Summary (German)

Lead
Lay summary
Viele Risikoentscheidungen haben Konsequenzen, die mit starken affektiven Reaktionen verbunden sind. Das Projekt untersucht, wie Affekt die Prozesse bei Risikoentscheidungen, insbesondere die Verarbeitung von Informationen über die Wahrscheinlichkeit des Auftretens der Konsequenzen, beeinflusst.
Risikoentscheidungen-also Entscheidungen, deren Konsequenzen zum Zeitpunkt der Entscheidung nicht sicher vorhersagbar sind-beziehen sich häufig auf Optionen, deren mögliche Konsequenzen starke Affekte auslösen (z.B. Flugzeugabsturz bei einer Reise). Trotzdem wurden die meisten Theorien zu Risikoentscheidungen (z.B. Prospekt-Theorie) anhand von Entscheidungen bei einfachen Lotterieproblemen entwickelt, die monetäre-und relativ affektarme-Konsequenzen haben. Eine Grundannahme dieser Theorien ist es, dass bei Risikoentscheidungen Konsequenz- und Wahrscheinlichkeitsinformationen integriert werden. Einige Forschungsarbeiten deuten darauf hin, dass bei affektreichen Risikoentscheidungen Wahrscheinlichkeitsinformation anders verarbeitet wird als bei affektarmen. Dies kann zu Entscheidungen führen, die statistisch nicht zu rechtfertigen sind-beispielsweise wenn trotz der sehr geringen Wahrscheinlichkeit eines Terroranschlags eine Reise mit dem Flugzeug vermieden wird.
Das Projekt hat zum Ziel, die unterschiedlichen Erklärungsansätze zu Entscheidungen bei affektreichen Optionen zu vergleichen, die neuronalen Grundlagen des Einflusses von Affekt besser zu verstehen und zu untersuchen, welchen Einfluss Altersprozesse und individuelle Faktoren (z.B. Zahlenblindheit) auf den Entscheidungsprozess haben. Dazu werden Experimente durchgeführt, bei denen Entscheidungsverhalten bei affektreichen Optionen und bei affektarmen Optionen direkt miteinander verglichen und mit verschiedenen Entscheidungsstrategien modelliert wird.
Das Projekt soll helfen, die begrenzte Gültigkeit klassischer Theorien von Risikoentscheidungen besser zu verstehen. Möglicherweise kommen bei affektreichen Entscheidungen qualitativ andere Prozesse zum Tragen als bei affektarmen Entscheidungen-d.h., die nicht mit der herkömmlichen Annahme der Integration von Konsequenz- und Wahrscheinlichkeitsinformation dargestellt werden können. Zudem kann durch die Untersuchung des Entscheidungsprozesses bei affektreichen Optionen herausgearbeitet werden, wie Entscheidungsverhalten verbessert werden kann (z.B. durch graphische Darstellung von Wahrscheinlichkeitsinformation). Die Untersuchung des Einflusses individueller Faktoren soll helfen die Personengruppen zu identifizieren, die am meisten von solchen Interventionen profitieren können.
Direct link to Lay Summary Last update: 21.02.2013

Responsible applicant and co-applicants

Employees

Publications

Publication
Constructing preference from experience: The endowment effect reflected in external information search.
Pachur Thorsten, Scheibehenne Benjamin (2012), Constructing preference from experience: The endowment effect reflected in external information search., in Journal of experimental psychology. Learning, memory, and cognition, 38(4), 1108-16.
Cognitive models of risky choice: Parameter stability and predictive accuracy of prospect theory
Glockner A, Pachur T (2012), Cognitive models of risky choice: Parameter stability and predictive accuracy of prospect theory, in COGNITION, 123(1), 21-32.
Time and moral judgment
Suter RS, Hertwig R (2011), Time and moral judgment, in COGNITION, 119(3), 454-458.
How Do People Judge Risks: Availability Heuristic, Affect Heuristic, or Both?
Pachur Thorsten, Hertwig Ralph, Steinmann Florian, How Do People Judge Risks: Availability Heuristic, Affect Heuristic, or Both?, in Journal of experimental psychology. Applied.
Strategy selection in risky choice: The impact of numeracy, affect, and cross-cultural differences.
Pachur T, Galesic M, Strategy selection in risky choice: The impact of numeracy, affect, and cross-cultural differences., in Journal of Behavioral Decision Making.

Scientific events

Active participation

Title Type of contribution Title of article or contribution Date Place Persons involved
7th International Conference on Thinking 04.07.2012 London, England
Tagung experimentell arbeitender Psychologen 02.04.2012 Mannheim, Deutschland
Tagung experimentell arbeitender Psychologen 14.03.2011 Halle
Tagung experimentell arbeitender Psychologen 22.03.2010 Saarbrücken, Deutschland
SPUDM 23.08.2009 Rovereto, Italien
Tagung experimentell arbeitender Psychologen 30.03.2009 Jena


Abstract

A key characteristic of our daily decision making is that the expected consequences of decisions often cannot be predicted with certainty. At best, we know the probability with which the consequences (or prospects) occur, thus turning our decisions into risky choices. Recent evidence has demonstrated that affects that are associated with the prospects have an impact on our decisions. For instance, choices might differ depending on whether the choice is between two monetary lotteries or between two drugs that can lead to specific, undesirable side effects, even when the two scenarios are nominally (measured in monetary terms) equivalent. We refer to this phenomenon as the affect-in-choice effect. Although this effect is likely to have important implication for how to understand, model and improve people’s decision making under risk, there is still relatively little research involving affective consequences. Consequently, the few empirical investigations studying the affect-in-choice effect have left various empirical and theoretical questions unanswered.According to one prominent approach, affective prospects impact risky choice by changing the way probabilities are weighted (Rottenstreich & Hsee, 2001). Specifically, affect-rich prospects are assumed to lead to a diminished sensitivity among intermediate probabilities and an increased sensitivity among extreme (i.e., very low or very high) probabilities. Alternatively, it has been argued that probability information is neglected altogether in risky decisions involving affect-rich prospects (Sunstein, 2003). Though these two views are related they lead to different predictions for rare and very frequent prospects. Here we propose a new methodology for investigating the affect-in-choice effect that allows us to directly compare choices involving affect-poor and affect-rich prospects. A first set of studies that we conducted using this methodology show that choices are indeed heavily influenced by the prospects’ affective richness (or lack thereof). Moreover, the results show a large proportion of within-person preference reversals between nominally equivalent gambles. Finally, a simple heuristic that derives a decision based only on the outcomes, ignoring all probability information, can predict people’s choices between affect-rich options as well as cumulative prospect theory, which uses a fitted weighting function. With the proposed set of studies, we aim to further elucidate the affect-in-choice effect, examine its generality, and test the different theoretical accounts for this effect against each other. Specifically, we are interested in (i) whether the effect generalizes to negative and positive affects, (ii) whether people indeed ignore probabilities even when the probabilities are very extreme (e.g., 0.0001, 0.9999), and (iii) whether there is evidence for probability neglect using process tracing tools. In addition, we will explore the neural correlates of the affect-in-choice effect and the hypothesized neglect of probabilities. Finally, we will test the possibility that-assuming the increased focus on emotional goals in older-adult decision makers-the affect-in-choice effect is more pronounced among older adults, relative to younger adults. The results of the proposed research can have both important theoretical and practical implications. First, they can reveal the limitations of the notion-assumed in key theories of risky choice-of affect-poor utility that is measured in monetary terms. Second, it may point to ways for improving decision making in many applied settings such as medical, legal, and political decision making, where prospects are often affect-rich.
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