Context effects: the proportional difference model and the reflection of preference.
The reflection effect (D. Kahneman & A. Tversky, 1979) was investigated using the stochastic model of choice developed by C. Gonzalez-Vallejo (2002). The model assumes that individuals make trade-offs among attribute values by relying on a difference variable. The model also specifies a threshold representing individual proclivities to reach to attribute differences. Two experiments demonstrated that changes in risk attitudes, from a gain to a loss situation, depended on the stimuli as well as on individuals' thresholds. Thresholds were generally lower in losses than in gains, indicating a risk-taking tendency. Thresholds were also lower when participants were endowed with greater savings. Model testing revealed better fits for the stochastic model than cumulative prospect theory (A. Tversky &. D. Kahneman, 1992).
D002755:Choice Behavior; D003657:Decision Making; D003662:Decision Theory; D006801:Humans; D007206:Individuality; D007449:Investments; D007600:Judgment; D011337:Probability Learning; D012309:Risk-Taking; D013269:Stochastic Processes