Animals' Choices Over Uncertain Outcomes: Further Experimental Results

MacDonald, Don N.; Kagel, John H.; Battalio, Raymond C.

doi:10.2307/2234427

Cited by 24 publications

(11 citation statements)

References 11 publications

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“…Specifically, Alternative H is unattractive in Problem 4 because the '0' outcome ( p ¼ 0.2) is overweighted, but it is attractive in Problem 5 because the '4' outcome ( p ¼ 0.2) is overweighted. Interestingly, MacDonald et al (1991) found a similar pattern in feedback-based decisions by rats.…”

Section: Resultsmentioning

confidence: 58%

Small feedback‐based decisions and their limited correspondence to description‐based decisions

Barron

Erev

2003

Behavioral Decision Making

658

656

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The present paper explores situations in which the information available to decision makers is limited to feedback concerning the outcomes of their previous decisions. The results reveal that experience in these situations can lead to deviations from maximization in the opposite direction of the deviations observed when the decisions are made based on a description of the choice problem. Experience was found to lead to a reversed common ratio/certainty effect, more risk seeking in the gain than in the loss domain, and to an underweighting of small probabilities. Only one of the examined properties of description-based decisions, loss aversion, seems to emerge robustly in these 'feedback-based' decisions. These results are summarized with a simple model that illustrates that all the unique properties of feedback-based decisions can be a product of a tendency to rely on recent outcomes. Copyright # 2003 John Wiley & Sons, Ltd. key words Probability learning; feedback-based decisions; reinforcement learning; prospect theory; Allais paradox Many common activities involve 'small' decision problems. Driving, for example, requires repeated selection among routes, speeds, and various other options. Although little time and effort is typically invested in these and similar small decisions, they can be consequential. The estimated cost of traffic accidents in the USA is more than 100 billion dollars a year (see e.g. Blincoe, 1994 1 ), and many of the accidents are at least partially products of ex-post unwise decisions.The current paper focuses on an important subset of the small decision problems exemplified above that can be referred to as 'small feedback-based' decisions. These problems are defined by three main properties. First, they are repeated; decision makers face the same problem many times in similar situations. Second,

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Section: Resultsmentioning

confidence: 58%

Small feedback‐based decisions and their limited correspondence to description‐based decisions

Barron

Erev

2003

Behavioral Decision Making

658

656

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“…Hertwig et al used a task in which participants sampled outcomes from two lotteries until they were ready to choose one of the lotteries from which to gain a randomly selected outcome. It is noteworthy that these two studies used quite different procedures, one involving feedback and multiple decisions, the other involving a single decision without feedback, but obtained similar results (but see MacDonald, 1985, andBattalio, 1991, for reports of a common-ratio effect in barpressing rats). Both Barron and Erev (2003) and Hertwig et al (2004) explained their results as due to the underrepresentation of rare events in small samples.…”

Section: Format Of Presentation and Decision-making Biasesmentioning

confidence: 80%

The Format in Which Uncertainty Information Is Presented Affects Decision Biases

2007

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We examined how the format in which uncertainty information is presented affects two biases in humans' choice behavior. In a computer task, participants were given four common-ratio effect and four commonconsequence effect problems in each of four different formats. In these problems, uncertainty information was described, as percentages (e.g., 80%) or as frequencies (e.g., 16/20), or was experienced, either serially (20 outcomes shown one at a time) or simultaneously (20 outcomes all shown at once). Presenting information as percentages attenuated the common-ratio effect and augmented the common-consequence effect, which suggests that these biases have different underlying mechanisms. Participants' percentage estimates of outcome likelihoods did not differ according to the format in which the information was presented; however, participants' nonverbal estimates of outcome likelihoods differed across formats. The results suggest that uncertainty information presented as percentages is processed differently than the same uncertainty information presented in other formats.The world is predictable, but only probabilistically so. Choices rarely lead to certain outcomes, and an important part of an organism's life involves assessing an option when multiple outcomes are possible. Foraging animals must allocate time across locations, even though there is no guarantee that any one location will provide sustenance at any given time. People must choose which route is likely to be fastest, which course of action is most likely to provide relief from back pain, and which job will provide the best balance of money, security, and enjoyment.In all these choices, there is an element of uncertainty as to which particular outcome will occur, and how this uncertainty is represented and processed determines the choices organisms make.In studies of decision making under uncertainty in humans, people receive information about the value of an outcome and its likelihood of occurrence before being asked to make a decision based on that information. Typically, information is given in a summarized form that includes probabilities and payouts (e.g., ''Lottery A pays $5 with a probability of .75''), and less frequently information is presented as frequencies or in graphical form (E.U. Weber, Shafir, & Blais, 2004). However, as Hertwig, Barron, Weber, and Erev (2004) pointed out, uncertainty information outside the laboratory must often be gathered from personal experience. In addition, direct experience with environmental contingencies is the only way in which nonverbal animals can gather uncertainty information. It is clear that both humans and nonverbal animals are able to extract this information from experience in order to behave adaptively. It follows that a question of primary importance is how decision making varies as a function of how uncertainty information is presented.Humans exhibit decision-making biases in which their choices are inconsistent with normative principles. One might wonder whether such decision biases reflect the f...

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“…When a different group was endowed with candy bars and asked to exchange for mugs, again very few (10%) exchanged their candy bars for mugs. Like humans, Rats violate the independence axiom, suggesting that rats distort probabilities in ways possibly similar to the way humans distort them (see McDonald et al 1991). Interestingly, recent experimental studies with non-human primates suggest that anomalies in decision-making may have an evolutionary origin.…”

Section: Decision-makingmentioning

confidence: 99%

Evolutionary Psychology in the Business Sciences

Saad¹

2011

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Animals' Choices Over Uncertain Outcomes: Further Experimental Results

Cited by 24 publications

References 11 publications

Small feedback‐based decisions and their limited correspondence to description‐based decisions

Small feedback‐based decisions and their limited correspondence to description‐based decisions

The Format in Which Uncertainty Information Is Presented Affects Decision Biases

Evolutionary Psychology in the Business Sciences

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