The description-experience gap in risky choice.
According to a common conception in behavioral decision research, two cognitive processes-overestimation and overweighting-operate to increase the impact of rare events on people's choices. Supportive findings stem primarily from investigations in which people learn about options via descriptions thereof. Recently, a number of researchers have begun to investigate risky choice in settings in which people learn about options by experiential sampling over time. This article reviews work across three experiential paradigms. Converging findings show that when people make decisions based on experience, rare events tend to have less impact than they deserve according to their objective probabilities. Striking similarities in human and animal experience-based choices, ways of modeling these choices, and their implications for risk and precautionary behavior are discussed.
Hertwig
Ralph
R
University of Basel, Department of Psychology, Missionsstrasse 60/62, CH-4055 Basel, Switzerland. Ralph.Hertwig@unibas.ch
Erev
Ido
I
D000818:Animals; D002755:Choice Behavior / Q000502:physiology*; D003657:Decision Making; D006801:Humans; D008960:Models, Psychological; D012309:Risk-Taking