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Is the description-experience gap in risky choice limited to rare events?

Date:
June 6, 2011
Source:
University of Alberta
Summary:
Researchers have found people confronted with risky choices respond differently when they rely on past experiences, rather than when they just focus on the odds of winning or losing.
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FULL STORY

Psychology researchers at the University of Alberta have found an interesting wrinkle in the decision- making process people use when gambling: People confronted with risky choices respond differently when they rely on past experiences, rather than when they just focus on the odds of winning or losing.

The research team gave people two kinds of choices. One was a choice between a sure win versus a double-or-nothing win. The other choice was between a sure loss versus a double-or- nothing loss. In some cases the odds were explained to the volunteer gamblers, and sometimes the players were just left to learn their chances through their experience playing the game.

Surprisingly, most people made the exact opposite choices when they were told the odds, opposed to when they learned about them on their own. With experience, the test subjects started to gamble on the double-or-nothing for wins and they avoided the risky choice for losses. Their gambling tendencies were reversed when they were told the odds.

"We think that people choose in fundamentally differently ways when they are remembering their past wins and losses than when they are thinking about abstract future possibilities," said U of A researcher Marcia Spetch. "When basing choices on memory, people may focus more on the bigger wins and the bigger losses."

Beyond this novel finding, this research provides a new task for studying gambling behaviour that may one day help in understanding risky choice behaviour and gambling addictions. A follow-up study is being conducted by the same research group using the same gambling task, and participants will be hooked up to MRI equipment to identify areas of the brain involved in risky decision making.

The research was led by Spetch and Elliot Ludvig from the U of A's departments of psychology and computing science. Ludvig is now a researcher at Princeton University. The research was published June 1 in the journal PLoS ONE.


Story Source:

The above story is based on materials provided by University of Alberta. Note: Materials may be edited for content and length.


Journal Reference:

  1. Elliot A. Ludvig, Marcia L. Spetch. Of Black Swans and Tossed Coins: Is the Description-Experience Gap in Risky Choice Limited to Rare Events? PLoS ONE, 2011; 6 (6): e20262 DOI: 10.1371/journal.pone.0020262

Cite This Page:

University of Alberta. "Is the description-experience gap in risky choice limited to rare events?." ScienceDaily. ScienceDaily, 6 June 2011. <www.sciencedaily.com/releases/2011/06/110602122302.htm>.
University of Alberta. (2011, June 6). Is the description-experience gap in risky choice limited to rare events?. ScienceDaily. Retrieved May 4, 2015 from www.sciencedaily.com/releases/2011/06/110602122302.htm
University of Alberta. "Is the description-experience gap in risky choice limited to rare events?." ScienceDaily. www.sciencedaily.com/releases/2011/06/110602122302.htm (accessed May 4, 2015).

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