Numeracy Predicts More Effortful and Elaborative Search Strategies in a Complex Risky Choice Context: A Process‐Tracing Approach

Abstract

The goal of the current study was to explore information search and processing differences between individuals who are less and more numerate in an attempt to better understand the mechanisms that might differentiate the choices they make. We did so using a computerized process‐tracing system known as MouseTrace, which presented monetary gambles in an alternative × attribute matrix with outcome (dollar amount) and probability information as attributes. This information was initially occluded but could be revealed by clicking on the cell that contained the desired information. Beginning with nine gambles offering the chance of gaining or losing a specified amount, participants (N = 110) narrowed down the options (to three and then one) using an inclusion or exclusion strategy. Consistent with previous research, inclusion was a more effortful strategy, and individuals who were higher in numeracy were more likely to select prospects with the highest expected value. Process measures revealed these individuals expended more effort (i.e., attended to and sought out more information and processed it in greater depth) and exhibited more compensatory processing than those who were lower in numeracy, but this sometimes depended on whether one was asked to include or exclude. These results serve as further evidence that individuals with higher levels of numeracy often engage in more elaborative processing of the decision task, which tends to lead to more optimal choices. However, they also suggest that individuals are adaptive and that the specific situation can matter. Copyright © 2016 John Wiley & Sons, Ltd.

The loss‐bet paradox: Actuaries, accountants, and other numerate people rate numerically inferior gambles as superior

“…Because such data are correlational, we also experimentally tested other mechanisms. In particular, we tested and found no support for the effect being due to the highly numerate attending more to the numeric outcomes as might have been expected based on prior research (e.g., Jasper et al, ); neither varying the visual salience of either monetary outcome nor changing the order in which they were presented influenced Loss condition results. Instead, H4 (that asking people to compare the magnitudes of the monetary outcomes would increase ratings of the Loss bet) was supported; ratings of both the more and less numerate increased relative to the Original Loss condition.…”

“…Alternatively and consistent with Jasper et al's () results, it may be that the less numerate simply do not attend as much to the numeric outcomes. Given attention's critical role in decision processes (Krajbich, Armel, & Rangel, ), simply making either the 5¢ loss or the $9 more salient then may result in the less numerate processing the bet in the same manner as the highly numerate.…”

“…In one study, this increased time in task partially mediated numeracy's effects on superior decisions (Ghazal, Cokely, & Garcia‐Retamero, ). When making choices among gambles, the more numerate attended to and sought out more information, processing numeric information in more depth (Jasper, Bhattacharya, & Corser, ). Second, they are more likely to do various number operations.…”

Poor peer work does not boost student confidence

“…Moreover, focusing on confidence operationalized as the belief that one is good at a specific subject ‡ is particularly relevant to the study of decision making because confidence is correlated with numeracy (Peters et al, 2015), which in turn is a key predictor of judgment and decision-making skills (Ghazal, Cokely, & Garcia-Retamero, 2014;Peters et al, 2006) and adaptive decision making (Jasper, Bhattacharya, & Corser, 2017).…”

“…Intervention research with students has discussed low confidence as a likely barrier (e.g., Stephens, Hamedani, & Destin, ; Yeager et al, ) but has not measured changes in confidence as an outcome, leaving it unclear whether and how confidence can be increased. Moreover, focusing on confidence operationalized as the belief that one is good at a specific subject is particularly relevant to the study of decision making because confidence is correlated with numeracy (Peters et al, 2015), which in turn is a key predictor of judgment and decision‐making skills (Ghazal, Cokely, & Garcia‐Retamero, ; Peters et al, ) and adaptive decision making (Jasper, Bhattacharya, & Corser, ).…”