Title

The Description–Experience Gap in Risky and Ambiguous Gambles

Date of Original Version

2014

Type

Article

Abstract or Description

Recent research in decision making reported a description–experience (DE) gap: opposite risky choices when decisions are made from descriptions (gambles in which probability distributions and outcomes are explicitly stated) and when decisions are made from experience (the knowledge of the gambles is obtained by sampling outcomes from unknown probability distributions before making a choice). The DE gap has been reported in gambles commonly involving a risky option (outcomes drawn from a fixed probability distribution) and a safe option (probability of the outcome is 1), or in gambles involving two risky options. Here, we extend the study of the DE gap to gambles in which people choose between a risky option and an ambiguous option (with two nested probability distributions, where the event-generation mechanism is more opaque than that in the risky option). We report empirical evidence and show a DE gap in gambles involving risky and ambiguous options. Participants' choices are influenced by the information format and by the ambiguous option: participants are ambiguity-seeking in experience and ambiguity-averse in description in problems involving both gains and losses. In order to find reasons for our results, we investigate participants' sampling behavior, and this analysis indicates choices according to a cognitive model of experiential decisions (instance-based learning). In experience, participants have small sample sizes, and participants choose options where high outcomes are experienced more frequently than expected. We discuss the implications of our results for the psychology of decision making in complex environments.

DOI

10.1002/bdm.1808

 

Published In

Journal of Behavioral Decision Making, 27, 4, 316-327.