Replicated alternatives and the role of confusion, chasing, and regret in decisions from experience

Journal of Behavioral Decision Making - Tập 20 Số 3 - Trang 305-322 - 2007
Eyal Ert1, Ido Erev1
1Max Wertheimer Minerva Center for Cognitive Studies, Faculty of Industrial Engineering and Management, Technion, Haifa, Israel

Tóm tắt

AbstractThe current paper explores choice among alternatives that can be classified into distinct classes. All the members of a particular class were ‘replicated alternatives’: they promised the same payoff distribution. Information to decision makers was limited to feedback concerning the realized (obtained and foregone) payoffs. Experiment 1 demonstrates that increasing the number of replicated alternatives creates confusion (which facilitates random choice) and changes the implications of the tendency to chase recent returns (i.e., select the alternative with the best recent outcomes). This effect, termed ‘confused chasing,’ facilitates risk seeking even when this behavior impairs expected earnings. Experiment 2 reveals that increasing the number of replicated alternatives can reduce (but does not eliminate) the tendency to underweight rare events. Experiment 3 shows that the relative importance of chasing and confusion is sensitive to the likelihood of realizing lower payoffs than the forgone payoffs. The main results are summarized with a simple model assuming that payoff sensitivity decreases with experienced regret. Copyright © 2006 John Wiley & Sons, Ltd.

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Thông tin xuất bản

Journal of Behavioral Decision Making

Tập 20 Số 3

305-322

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