Featured Research

from universities, journals, and other organizations

Consumer predictions: Do categories matter when predicting the lottery or stock market?

Date:
April 15, 2014
Source:
Journal of Consumer Research, Inc.
Summary:
From sports to the stock market and even winning the lottery, it’s in our nature to predict who or what will come out on top. But, sometimes we can’t see the forest for the trees. According to a new study, people are more likely to make a prediction about something when it is grouped in a large category of similar items.

From sports to the stock market and even winning the lottery, it's in our nature to predict who or what will come out on top. But, sometimes we can't see the forest for the trees. According to a new study in the Journal of Consumer Research, people are more likely to make a prediction about something when it is grouped in a large category of similar items.

"One factor that can contribute to a person's flawed judgment is categorization," write authors Mathew S. Isaac (Seattle University) and Aaron R. Brough (Utah State University). "When making a prediction, we can become distracted by how all of the various possibilities are grouped. The basic question of our research is, 'Can the size of the category make an outcome seem more or less likely to occur?'"

In a series of five experiments, the authors investigated how changes in category size affected judgments about probability. In one experiment, each participant was given a lottery ticket. Lottery ticket colors varied-most of the distributed tickets were blue while some tickets were yellow. Participants were asked to write their names on the back of their ticket and indicate whether they would wager additional money on winning the overall lottery. Despite an equal probability of any ticket being drawn, participants holding blue tickets were willing to wager an average of 25% more money than the participants holding yellow tickets.

Offering insight on how category size can impact a person's perception of risk and probability, study results can help businesses and policy makers better communicate risk-related information. For example, when crafting health-related messages, grouping a highly preventable disease such as lung cancer with a large group of other potential health risks could increase the perceived risk of contracting lung cancer and, in turn, persuade people to visit the doctor for regular screenings.

"While organizing our world into groups or categories is an incredibly efficient way to process complex information, we sometimes have to focus on the individual outcome that we are trying to predict," the authors conclude.


Story Source:

The above story is based on materials provided by Journal of Consumer Research, Inc.. Note: Materials may be edited for content and length.


Journal Reference:

  1. Mathew S. Isaac and Aaron R. Brough. Judging a Part by the Size of Its Whole: The Category Size Bias in Probability Judgments. Journal of Consumer Research, August 2014

Cite This Page:

Journal of Consumer Research, Inc.. "Consumer predictions: Do categories matter when predicting the lottery or stock market?." ScienceDaily. ScienceDaily, 15 April 2014. <www.sciencedaily.com/releases/2014/04/140415112258.htm>.
Journal of Consumer Research, Inc.. (2014, April 15). Consumer predictions: Do categories matter when predicting the lottery or stock market?. ScienceDaily. Retrieved July 23, 2014 from www.sciencedaily.com/releases/2014/04/140415112258.htm
Journal of Consumer Research, Inc.. "Consumer predictions: Do categories matter when predicting the lottery or stock market?." ScienceDaily. www.sciencedaily.com/releases/2014/04/140415112258.htm (accessed July 23, 2014).

Share This




More Science & Society News

Wednesday, July 23, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Courts Conflicted Over Healthcare Law

Courts Conflicted Over Healthcare Law

AP (July 22, 2014) Two federal appeals courts issued conflicting rulings Tuesday on the legality of the federally-run healthcare exchange that operates in 36 states. (July 22) Video provided by AP
Powered by NewsLook.com
What Self-Made Women Need to Know Financially Before Getting Hitched

What Self-Made Women Need to Know Financially Before Getting Hitched

TheStreet (July 21, 2014) Halle Berry was recently ordered to pay her ex-boyfriend Gabriel Aubry $16,000 a month in child support by a California judge for their daughter Nahla. As women make strides in the workforce, they are increasingly left holding the bag when relationships end regardless of marital status. 'What Monied Women Need to Know Before Getting Married or Cohabitating' discusses information such as debt incurred during the marriage is both spouse's responsibility at divorce, whether after ten years of marriage spouses are entitled to half of everything and why property acquired within the marriage is fair game without a pre-nup. Video provided by TheStreet
Powered by NewsLook.com
$23.6 Billion Awarded To Widow In Smoking Lawsuit

$23.6 Billion Awarded To Widow In Smoking Lawsuit

Newsy (July 20, 2014) Cynthia Robinson claims R.J. Reynolds Tobacco Company hid the health and addiction risks of its products, leading to the death of her husband in 1996. Video provided by Newsy
Powered by NewsLook.com
Clock Ticks Down on Internet Speed Debate

Clock Ticks Down on Internet Speed Debate

Reuters - US Online Video (July 18, 2014) The FCC received more than 800,000 comments on whether and how internet speeds should be regulated, even crashing its system. Lily Jamali reports. Video provided by Reuters
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins