title: Prospect relativity: how choice options influence decision under risk.
abstract: In many theories of decision under risk (e.g., expected utility theory, rank-dependent utility theory, and prospect theory), the utility of a prospect is independent of other options in the choice set. The experiments presented here show a large effect of the available options, suggesting instead that prospects are valued relative to one another. The judged certainty equivalent for a prospect is strongly influenced by the options available. Similarly, the selection of a preferred prospect is strongly influenced by the prospects available. Alternative theories of decision under risk (e.g., the stochastic difference model, multialternative decision field theory, and range frequency theory), where prospects are valued relative to one another, can provide an account of these context effects.
authors.affiliation: Department of Psychology, University of Warwick, Coventry, England. neil.stewart@warwick.ac.uk
authors.forename: Neil
authors.initials: N
authors.lastname: Stewart
authors.forename: Nick
authors.initials: N
authors.lastname: Chater
authors.forename: Henry P
authors.initials: HP
authors.lastname: Stott
authors.forename: Stian
authors.initials: S
authors.lastname: Reimers
mesh_terms: D000293:Adolescent; D000328:Adult; D002755:Choice Behavior; D003657:Decision Making; D005260:Female; D006801:Humans; D008297:Male; D008960:Models, Psychological; D011336:Probability; D011582:Psychological Theory; D011897:Random Allocation