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The Reversed Description-Experience Gap: Disentangling Sources of Presentation Format Effects in Risky Choice

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Abstract

Previous literature has suggested that risky choice patterns in general-and probability weighting in particular-are strikingly different in experience-based as compared with description-based formats. In 2 reanalyses and 3 new experiments, we investigate differences between experience-based and description-based decisions using a parametric approach based on cumulative prospect theory (CPT). Once controlling for sampling biases, we consistently find a reversal of the typical description-experience gap, that is, a reduced sensitivity to probabilities and increased overweighting of small probabilities in decisions from experience as compared with decisions from descriptions. This finding supports the hypothesis that regression to the mean effects in probability estimation are a crucial source of differences between both presentation formats. Further analyses identified task specific information asymmetry prevalent in gambles involving certainty as a third source of differences. We present a novel conceptualization of multiple independent sources of bias that contribute to the description-experience gap, namely sampling biases and task specific information asymmetry on the one hand, and regression to the mean effects in probability estimation on the other hand. (PsycINFO Database Record
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... Another important factor seems to be that decision makers also represent information they have available about the options differently in experience than in description. This is suggested by analyses that used cumulative prospect theory (CPT; Tversky & Kahneman, 1992) to model people's decisions from experience based on the actually experienced information and compared the estimated model parameters to those obtained for decisions from description (Glöckner et al., 2016;Kellen et al., 2016;Wulff et al., 2018). In CPT, choices are modeled based on a value function and a probability weighting function, which indicate how outcome and probability information, respectively, are distorted in people's choices (e.g., R. Gonzalez & Wu, 1999). ...
... Research with the sampling paradigm (Hertwig et al., 2004) has identified boundary conditions of the description-experience gap: It seems to be larger in choices between a safe and a risky option (vs. between two risky options) and in choices in which the smallest probability is smaller (vs. larger; Glöckner et al., 2016;Wulff et al., 2018). In addition, the gap is larger in problems in which people draw fewer samples in experience (Glöckner et al., 2016). ...
... larger; Glöckner et al., 2016;Wulff et al., 2018). In addition, the gap is larger in problems in which people draw fewer samples in experience (Glöckner et al., 2016). ...
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Decision makers seem to evaluate risky options differently depending on the learning mode—that is, whether they learn about the options’ payoff distributions from a summary description (decisions from description) or by drawing samples from them (decisions from experience). Are there also discrepancies when people choose between a described and an experienced option? In two experiments, we compared people’s behavior in a condition with mixed learning modes (i.e., one option described, the other experienced with the sampling paradigm) to that in conditions where both options were either described or experienced. Using cumulative prospect theory’s value and probability weighting functions to characterize how observed outcome and probability information was subjectively distorted in people’s choices, we found clear differences between the pure description and pure experience conditions. In the mixed-mode condition, however, the value and probability weighting functions did not differ between the described and the experienced options, suggesting that people evaluated them based on a joint representation despite the different learning modes. Participants’ choices were not biased toward the described or the experienced option. Finally, per-option search effort for an experienced option tended to be higher in the mixed-mode condition than in the purely experience-based condition. Our findings demonstrate that how people evaluate described and experienced options depends on the learning mode of the other option in the choice set, highlighting a previously overlooked boundary condition of discrepancies between description- and experience-based choice.
... Past work has shown that manipulating the instructions given on decision problems can affect people's choices (32). We used a subset of our database to analyze the impact of such instructions: The same experiment was presented to two groups of participants, with only one being informed about the number of outcomes they could expect (52). We predicted that participants with prior information about the number of unique outcomes would more frequently engage in discovery-driven search in incomplete states of experience than those without such prior information and that this effect would be especially pronounced in the first few problems encountered, when participants' first-hand environmental knowledge was still limited. ...
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... However, this metaanalysis also demonstrates striking heterogeneity across studies with respect to the size of the gap, ranging from very small to very large. A study even finds a reversed D-E gap, with subjects in 'Experience' appearing to overweight rare events more than those in 'Description' (Glockner et al., 2016). How can we make sense of these diverse findings? ...
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... Many factors affect the process by which people make risky choices. Presentation format and task complexity affect information processing in general (Payne, 1976;Orquin et al., 2021) and specifically in risky choices (Glöckner et al., 2016;Zilker et al., 2020;Oprea, 2022). Repetition matters, and eye-movement patterns in a risk task repeated 100 times were more consistent with deliberate calculations (weighting and adding process) than those in a single-decision task (Su et al., 2013), so it is not surprising that most people's risk preferences became more consistent over time (Charness and Chemaya, 2023). ...
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... This prediction was supported in many studies of repeated feedback-based decisions from experience (see review in). Yet, studies of one-shot decisions from experience based on free sampling reveals a boundary condition (seeGlöckner et al., 2016). https://doi.org/10.1017/jdm.2023.49 ...
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