Foresight, risk attitude, and utility maximization in naturalistic sequential high-stakes decision making

Chen, Zhiqin; John, Richard S.

doi:10.1016/j.jmp.2018.08.004

Cited by 4 publications

(5 citation statements)

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“…To address the potential concern of capitalizing on chance consistencies between the observed data and the descriptive choice models, we simulated 1000 fictitious games for each version of the DOND game. For each game, the banker’s offer at each round was determined based on the estimated banker’s offer regression equations from Chen and John (2018). Each fictitious player was randomly assigned a “deal” round, independent of the banker’s offers and the remaining briefcases.…”

Section: Analysis and Resultsmentioning

confidence: 99%

“…Previous modeling studies with the DOND game mostly adopted the assumption of a representative agent with particular choice behavior that could account for all players at all rounds in the game (e.g., Aissia, 2016; Andersen et al, 2008; Blavatskyy & Pogrebna, 2010; Bombardini & Trebbi, 2012; Botti et al, 2008; Deck et al, 2008; de Roos & Sarafidis, 2010; Mulino et al, 2009; Post et al, 2008). Chen and John (2018) performed a by-round analysis to examine how risk attitude and consistency in choice behavior changed over rounds, assuming homogeneity of risk attitude across players. Many have acknowledged the limitation of assuming homogeneity of risk attitude across both players and rounds of the DOND game (e.g., Aissia, 2016; Bombardini & Trebbi, 2012; Botti et al, 2008; Deck et al, 2008; Mulino et al, 2009).…”

Section: Deal or No Deal Gamementioning

confidence: 99%

“…The present study analyzed the same archival data as Chen and John (2018), including one U.K. and two U.S. versions of the DOND game show. However, due to model assumptions and the ideographic analysis used, the present study considers only games in which players eventually accepted one of the banker’s offers during the game 1 .…”

Section: Game Datamentioning

confidence: 99%

“…1The data set used for the present study is a subset of Chen and John’s (2018) study, which modeled choice behavior by round and included those players who never made a “deal” in the game. That data set included 924 U.K., 208 USP, and 289 USS games.…”

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confidence: 99%

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Decision heuristics and descriptive choice models for sequential high-stakes risky choices in the deal or no deal game.

Chen¹,

John²

2021

Decision

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To extend decision theory models to account for observed choice behavior in sequential risky choices with multiple outcomes, the present study examined and compared 30 heuristic choice models and 6 baseline choice models in a naturalistic, sequential highstakes game show context. One-thousand and ninety-five games from one British and two American versions of the Deal or No Deal (DOND) game were included in the analysis. The heuristic choice models were constructed by pairing 10 different decision heuristic assumptions with 3 fundamental choice models, including a ratio, an expected utility, and a probability discounting model. The baseline models directly employed the three fundamental choice models with two different sets of outcomes. A nonparametric ratio model, with the decision heuristic assumptions of a reference-dependent probability of winning and a representative value of a sum of all outcomes in a risky choice, significantly outperformed the other 35 descriptive choice models in accounting for observed sequential choices. The reference-dependent probability proposed in the present study represents the overall probability of winning or losing, given a reference outcome in a complex risky choice. A representative value, rather than each single outcome, was added to the choice model. The total percentage of players whose binary choices are consistent with our best model is 94.25%. Compared to the other models, the most consistent model showed more distinct correct predictions. The overall results suggest that players in the DOND game make sequential risky choices with multiple outcomes in a heuristic manner.

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Section: Analysis and Resultsmentioning

confidence: 99%

Section: Deal or No Deal Gamementioning

confidence: 99%

Section: Game Datamentioning

confidence: 99%

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confidence: 99%

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Decision heuristics and descriptive choice models for sequential high-stakes risky choices in the deal or no deal game.

Chen¹,

John²

2021

Decision

Self Cite

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“…This is not the case in risky choice with cash-out availability because the final outcome of a bet tends to become more predictable over time (e.g., the outcome of a soccer match becomes increasingly certain as the match goes on), and therefore less risky 2 . Separately, choices that share some features with the decision to accept or reject a cash-out offer also occur in the game show 'Deal or No Deal', where they have been analysed as exemplars of real-world, high-stakes risky decision making (Chen & John, 2018;Deck et al, 2008;Post et al, 2008). In this setting, the decision to take a 'deal' may be similar to the decision to accept a cash-out offer in a sports-betting app; even so, however, analyses of Deal or No Deal choice data focus only on the second part of the choice sequence described above (the cash-out decision), without an initial risky-choice component.…”

Section: Introductionmentioning

confidence: 99%

People place larger bets when risky choices provide a post-bet option to ‘cash out’

Bennett,

Albertella,

Forbes

et al. 2023

Preprint

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After a risky choice, decision-makers must frequently wait out a delay period before the outcome of the choice becomes known. In contemporary sports-betting apps, decision-makers can ‘cash out’ of their bet during this delay period by accepting a discounted immediate payout. An important open question is how availability of a post-choice cash-out option alters choice. We investigated this question using a novel gambling task that incorporated a cash-out option during the delay between bet and outcome. Across two experiments (N = 240 recruited via Prolific), cash-out availability increased participants’ bet amounts by up to 35%. Likelihood of cashing out was anticorrelated between bets with improving versus worsening odds, and the effect of cash-out availability on bet amount was correlated with likelihood of cashing out only in bets with worsening odds. Results suggest that cash-out availability may promote larger bets by allowing bettors to avoid losing their entire stake.

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People Place Larger Bets When Risky Choices Provide a Postbet Option to Cash Out

Bennett,

Albertella,

Forbes

et al. 2024

Psychol Sci

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After a risky choice, decision makers must frequently wait out a delay period before the outcome of their choice becomes known. In contemporary sports-betting apps, decision makers can “cash out” of their bet during this delay period by accepting a discounted immediate payout. An important open question is how availability of a postchoice cash-out option alters choice. We investigated this question using a novel gambling task that incorporated a cash-out option during the delay between bet and outcome. Across two experiments ( N = 240 adults, recruited via Prolific), cash-out availability increased participants’ bet amounts by up to 35%. Participants who were more likely to cash out when odds deteriorated were less likely to cash out when odds improved. Furthermore, the effect of cash-out availability on bet amounts was positively correlated with individual differences in cash-out propensity for bets with deteriorating odds only. These results suggest that cash-out availability may promote larger bets by allowing bettors to avoid losing their entire stake.

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Foresight, risk attitude, and utility maximization in naturalistic sequential high-stakes decision making

Cited by 4 publications

References 50 publications

Decision heuristics and descriptive choice models for sequential high-stakes risky choices in the deal or no deal game.

Decision heuristics and descriptive choice models for sequential high-stakes risky choices in the deal or no deal game.

People place larger bets when risky choices provide a post-bet option to ‘cash out’

People Place Larger Bets When Risky Choices Provide a Postbet Option to Cash Out

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