Amos Tversky's research while affiliated with Stanford University and other places
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Publications (243)
This book presents the definitive exposition of ‘prospect theory’, a compelling alternative to the classical utility theory of choice. Building on the 1982 volume, Judgement Under Uncertainty, this book brings together seminal papers on prospect theory from economists, decision theorists, and psychologists, including the work of the late Amos Tvers...
Expected utility theory reigned for several decades as the dominant normative and descriptive model of decision making under uncertainty, but it has come under serious question in recent years. There is now general agreement that the theory does not provide an adequate description of individual choice: a substantial body of evidence shows that deci...
This article presents a criticism of the theory of expected utility as a descriptive model of decision making under risk, and presents the prospective theory as an alternative model. The choices between risky alternatives show several general effects that are not consistent with the principal of the theory of utility. The certainty effect, for inst...
This chapter reviews selected psychological research on human decision making. The classical, rational theory of choice holds that decisions reflect consistent, stable preferences, which are unaffected by logically immaterial changes in context, presentation, or description. In contrast, empirical research has found preferences to be sensitive to l...
STRESZCZENIE: Teoria perspektywy D. Kahnemana i A. Tversky'ego zakłada, że ludzie są bardziej skłonni do podejmowania ryzyka dzia-łając w sferze strat, niż w sferze zysków. Zgodnie z tym założeniem funkcja wartości ma wypukły przebieg w sferze zysków, natomiast wklęsły w sferze strat. Te założenia poddano weryfikacji w bada-niach dotyczących podejm...
This interdisciplinary work is a collection of major essays on reasoning: deductive, inductive, abductive, belief revision, defeasible (non-monotonic), cross cultural, conversational, and argumentative. They are each oriented toward contemporary empirical studies. The book focuses on foundational issues, including paradoxes, fallacies, and debates...
One of the main themes that has emerged from behavioral decision research during the past three decades is the view that people's preferences are often constructed in the process of elicitation. This idea is derived from studies demonstrating that normatively equivalent methods of elicitation (e.g., choice and pricing) give rise to systematically d...
One of the main themes that has emerged from behavioral decision research during the past three decades is the view that people's preferences are often constructed in the process of elicitation. This idea is derived from studies demonstrating that normatively equivalent methods of elicitation (e.g., choice and pricing) give rise to systematically d...
One of the main themes that has emerged from behavioral decision research during the past three decades is the view that people's preferences are often constructed in the process of elicitation. This idea is derived from studies demonstrating that normatively equivalent methods of elicitation (e.g., choice and pricing) give rise to systematically d...
You're in a world all your own. It's hard to describe. But the basket seems to be so wide. No matter what you do, you know the ball is going to go in.
—Purvis Short, of the NBA's Golden State Warriors
This statement describes a phenomenon known to everyone who plays or watches the game of basketball, a phenomenon known as the “hot hand.” The term r...
Consciousness is at the very core of the human condition. Yet only in recent decades has it become a major focus in the brain and behavioral sciences. Scientists now know that consciousness involves many levels of brain functioning, from brainstem to cortex. The almost seventy articles in this book reflect the breadth and depth of this burgeoning f...
Normative and descriptive theories of choice assume that absolute attribute values are key determinants of preferences. Building on research on the compromise effect, we propose that absolute attribute values often play a relatively minor role in the construction of preferences and consumers rely primarily on the relative positions of product alter...
this article closely match those in Rabin (forthcoming).
This exciting volume marks the birth of a new field, one which attempts to study law with reference to an accurate understanding of human behavior. It reports new findings in cognitive psychology which show that people are frequently both unselfish and over-optimistic; that people have limited willpower and limited self-control; and that people are...
We develop a belief-based account of decision under uncertainty. This model predicts decisions under uncertainty from (i) judgments of probability, which are assumed to satisfy support theory; and (ii) decisions under risk, which are assumed to satisfy prospect theory. In two experiments, subjects evaluated uncertain prospects and assessed the prob...
Probabilistic insurance is an insurance policy involving a small probability that the consumer will not be reimbursed. Survey data suggest that people dislike probabilistic insurance and demand more than a 20% reduction in the premium to compensate for a 1% default risk. While these preferences are intuitively appealing they are difficult to reconc...
Research has shown that the judged probability of an event depends on the specificity with which the focal and alternative hypotheses are described. In particular, unpacking the components of the focal hypothesis generally increases the judged probability of the focal hypothesis, while unpacking the components of the alternative hypothesis decrease...
Myopic loss aversion is the combination of a greater sensitivity to losses than to gains and a tendency to evaluate outcomes
frequently. Two implications of myopic loss aversion are tested experimentally. 1. Investors who display myopic loss aversion
will be more willing to accept risks if they evaluate their investments less often. 2. If all payof...
Support theory represents probability judgment in terms of the support, or strength of evidence, of the focal relative to the alternative hypothesis. It assumes that the judged probability of an event generally increases when its description is unpacked into disjoint components (implicit subadditivity). This article presents a significant extension...
The term 'money illusion' refers to a tendency to think in terms of nominal rather than real monetary values. Money illusion has significant implications for economic theory, yet it implies a lack of rationality that is alien to economists. This paper reviews survey questions regarding people's reactions to variations in inflation and prices, desig...
Probabilistic insurance is an insurance policy involving a small probability that the consumer will not be reimbursed. Survey data suggest that people dislike probabilistic insurance and demand more than a 20% reduction in the premium to compensate for a 1% default risk. While these preferences are intuitively appealing they are difficult to reconc...
The study of heuristics and biases in judgement has been criticized in several publications by G. Gigerenzer, who argues that "biases are not biases" and "heuristics are meant to explain what does not exist" (1991, p. 102). The article responds to Gigerenzer's critique and shows that it misrepresents the authors' theoretical position and ignores cr...
We examine the confidence and accuracy with which people make personality trait inferences and investigate some consequences of the hypothesis that such judgments are based on similarity or conceptual relatedness. Given information concerning a target person's standing on three global personality dimensions, American and Israeli subjects were asked...
The study of heuristics and biases in judgment has been criticized in several publications by G. Gigerenzer, who argues that “biases are not biases” and “heuristics are meant to explain what does not exist” (1991, p. 102). This article responds to Gigerenzer's critique and shows that it misrepresents the authors' theoretical position and ignores cr...
Classical theories of choice associate with each option a unique value such that, given an offered set, the decision maker chooses the option of highest value. An immediate consequence is context-independence: the relative ranking of any two options should not vary with the presence or absence of other options. Five experiments reveal two systemati...
There is a widespread and strongly held belief that arthritis pain is influenced by the weather; however, scientific studies have found no consistent association. We hypothesize that this belief results, in part at least, from people's tendency to perceive patterns where none exist. We studied patients (n = 18) for more than I year and found no sta...
We examine predictions and judgments of confidence based on one-sided evidence. Some subjects saw arguments for only one side of a legal dispute while other subjects (called 'jurors') saw arguments for both sides. Subjects predicted the number of jurors who favored the plaintiff in each case. Subjects who saw only one side made predictions that wer...
Professional options traders priced risky prospects as well as uncertain prospects whose outcomes depended on future values of various stocks. The prices of the risky prospects coincided with their expected value, but the prices of the uncertain prospects violated expected utility theory. An event had greater impact on prices when it turned an impo...
The overconfidence observed in calibration studies has recently been questioned on both psychological and methodological grounds. In the first part of the article we discuss these issues and argue that overconfidence cannot be explained as a selection bias, and that it is not eliminated by random sampling of questions. In the second part of the art...
We investigate the behavior of players in a two-person competitive game. One player “hides” a treasure in one of four locations, and the other player “seeks” the treasure in one of these locations. The seeker wins if her choice matches the hider’s choice; the hider wins if it does not. According to the classical game-theoretic analysis, both player...
Research in cognitive psychology has indicated that alternative descriptions of the same event can give rise to different probability judgments. This observation has led to the development of a descriptive account, called support theory, which assumes that the judged probability of an explicit description of an event (that lists specific possibilit...
Decision theory distinguishes between risky prospects, where the probabilities associated with the possible outcomes are assumed to be known, and uncertain prospects, where these probabilities are not assumed to be known. Studies of choice between risky prospects have suggested a nonlinear transformation of the probability scale that overweights lo...
Decisions under uncertainty depend not only on the degree of uncertainty but also on its source, as illustrated by Daniel Ellsberg's (1961) observation of ambiguity aversion. In this article, the authors propose the comparative ignorance hypothesis, according to which ambiguity aversion is produced by a comparison with less ambiguous events or with...
To accommodate the observed pattern of risk-aversion and risk-seeking, as well as common violations of expected utility (e.g., the certainty effect), the authors introduce and characterize a weighting function according to which an event has greater impact when it turns impossibility into possibility, or possibility into certainty, than when it mer...
Presents a new theory of subjective probability according to which different descriptions of the same event can give rise to different judgments. The experimental evidence confirms the major predictions of the theory. First, judged probability increases by unpacking the focal hypothesis and decreases by unpacking the alternative hypothesis. Second,...
There is a growing body of evidence that people's choices between risky and riskless options depend on the framing of the problem and the context of choice, contrary to the assumptions of description invariance and context independence that underlie rational decision theories. This article reviews these phenomena and discusses their implications. T...
Judgment under Uncertainty: Heuristics and Biases Many decisions are based on beliefs concerning the likelihood of un-certain events such as the outcome of an election, the guilt of a defen-dant, or the future value of the dollar. uncertain events are expressed in numerical form as odds or subjective probabilities. What determines such beliefs? How...
This paper considers the role of reasons and arguments in the making of decisions. It is proposed that, when faced with the need to choose, decision makers often seek and construct reasons in order to resolve the conflict and justify their choice, to themselves and to others. Experiments that explore and manipulate the role of reasons are reviewed,...
The common usage of personality trait terms in the language includes an implicit quantification that is part of the accepted meaning of the term. This aspect of a trait's meaning is here called its scope. Traits with high scope, such as honest, require a high relative frequency of behavioral manifestation before they are attributed. In contrast, lo...
The standard theory of choice---based on value maximization---associates with each option a real value such that, given an offered set, the decision maker chooses the option with the highest value. Despite its simplicity and intuitive appeal, there is a growing body of data that is inconsistent with this theory. In particular, the relative attracti...
Judgments of probability are commonly evaluated by 2 criteria: (1) calibration, namely, the correspondence between stated confidence and rate of occurrence, and (2) resolution, namely, the ability to distinguish between events that do and do not occur. Two representations of probability judgments are contrasted: the designated form that presupposes...
This paper presents a method for axiomatizing a variety of models for decision making under uncertainty, including Expected Utility and Cumulative Prospect Theory. This method identifies, for each model, the situations that permit consistent inferences about the ordering of value differences. Examples of rank-dependent and sign-dependent preference...
Choice often produces conflict. This notion, however, plays no role in classical decision theory, in which each alternative is assigned a value, and the decision maker selects from every choice set the option with the highest value. We contrast this principle of value maximization with the hypothesis that the option to delay choice or seek new alte...
When thinking under uncertainty, people often do not consider appropriately each of the relevant branches of a decision tree, as required by consequentialism. As a result they sometimes violate Savage's sure-thing principle. In the Prisoner's Dilemma game, for example, many subjects compete when they know that the opponent has competed and when the...
One of the basic axioms of the rational theory of decision under uncertainty is Savage's (1954) sure-thing principle (STP). It states that if prospect x is preferred to y knowing that Event A occurred, and if x is preferred to y knowing that A did not occur, then x should be preferred to y even when it is not known whether A occurred. We present ex...
Consumer choice is often influenced by the context, defined by the set of alternatives under consideration. Two hypotheses about the effect of context on choice are proposed. The first hypothesis, tradeoff contrast, states that the tendency to prefer an alternative is enhanced or hindered depending on whether the tradeoffs within the set under cons...
Consumer choice is often influenced by the context, defined by the set of alternatives under consideration. Two hypotheses about the effect of context on choice are proposed. The first hypothesis, tradeoff contrast, states that the tendency to prefer an alternative is enhanced or hindered depending on whether the tradeoffs within the set under cons...
The pattern of overconfidence and underconfidence observed in studies of intuitive judgment is explained by the hypothesis that people focus on the strength or extremeness of the available evidence (e.g., the warmth of a letter or the size of an effect) with insufficient regard for its weight or credence (e.g., the credibility of the writer or the...
We investigated decisions involving multiple independent uncertain prospects. At the extremes, a decision maker may either consider each prospect as a separate event (segregation) or evaluate the overall distribution of outcomes (aggregation). Contrary to choice by segregation, people sometimes reject a single gamble but accept a repeated play. On...
We develop a new version of prospect theory that employs cumulative rather than separable decision weights and extends the theory in several respects. This version, called cumulative prospect theory, applies to uncertain as well as to risky prospects with any number of outcomes, and it allows different weighting functions for gains and for losses....
Much experimental evidence indicates that choice depends on the status quo or reference level: changes of reference point often lead to reversals of preference. The authors present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point. The central assumption of...
We investigate the relation between judgments of probability and preferences between bets. A series of experiments provides support for the competence hypothesis that people prefer betting on their own judgment over an equiprobable chance event when they consider themselves knowledgeable, but not otherwise. They even pay a significant premium to be...
The mathematical analysis of the form of measurement axioms requires some specific methods. The mathematical concepts are drawn from mathematical logic and are relatively special compared with the mathematical ideas. Axiomatization is an activity that is sometimes found in mathematics and science, but not always. Its origins are ancient, and it is...
Most work in the theory of measurement has been based on additive representations for various kinds of structures. There are good reasons for studying the structures in which the numerical combination rules are intrinsically nonadditive. This chapter discusses nonadditivity in its various guises. The approach to nonadditivity is pursued in the chap...
This chapter describes the attempts to deal with the classes of real transformation groups that can arise in measurement and the types of structure that give rise to representations with specified transformation groups. Although the general concepts of M-point homogeneity and N-point uniqueness apply to conjoint structures, they are not sufficientl...
Certain numerical statements involving measurement representations are meaningless in the sense that their truth value is dependent on which particular representation or representations are being employed. The subject of meaningfulness has two major controversies. First, how to capture the idea of definability of relations; and the second centers o...
The present report summarizes two projects. The first project, which focuses on riskless choice, involves a series of experiments that demonstrate the phenomenon of loss aversion: losses and disadvantages have greater impact on preference than gains and advantages. the evidence shows that choice depends on the status quo or reference level, and tha...
Tension between health policy and medical practice exists in many situations. For example, regional variations in practice patterns persist despite extensive shared information,1 2 3 there are substantial deviations from accepted guidelines daily in the care of patients,4 5 6 7 and disproportionate amounts of care are given to selected individuals....
We investigated possible explanations of the finding that the relative weight (W) of common components in similarity judgments is higher for verbal than for pictorial stimuli. A serial presentation of stimulus components had no effect on verbal stimuli; it increased the impact of both common and distinctive components of pictorial stimuli but did n...
G. Keren's (see record 1990-27344-001) alternative interpretation is refuted by the data in Table 14 of I. Ritov et al's (see record 1990-27355-001) article on differential weighting of common and distinctive components. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
We note that Keren’s alternative interpretation of our findings is refuted by the data summarized in Table 14 of our original article.
G. Keren's (see record 1990-27344-001) alternative interpretation is refuted by the data in Table 14 of I. Ritov et al's (see record 1990-27355-001) article on differential weighting of common and distinctive components.
Citations
... In the broader decision making literature, it is well established that people develop decision making shortcuts when time and data are limited and when similar scenarios arise regularly, and that this can lead to decision making biases (Bazerman & Moore, 2013;Kahneman & Tversky, 1996;Newell & Simon, 1972). Interestingly, in the family communications literature, studies have also, for quite some time, suggested that family decision making is particularly likely to rely on such shortcuts and more implicit, unreflective decision making, as a result of time and information limitations, and regularity of decisions, meaning they are often made quickly and spontaneously (Sillars & Kalbfleisch, 1989). ...
... Although conceptually intuitive, much of the evidence that supports prospect theory comes from experimental studies (e.g., Tversky and Kahneman, 1990;Knetsch et al., 2001;Imas, 2016, etc.). Not surprisingly, adding non-experimental evidence of loss aversion has become an active research topic. ...
... In the absence of sufficient knowledge that describes the interactions between social and technological aspects of threats, their assessment either omits them [31] or relies on expert elicitation [32,33]. Expert-centred techniques, however, are not bound by subjectivity, but rather produce arbitrary parameterisation of the risk based on the available knowledge that comes to mind easily, erroneously used as an objective measure [34,35]. False perceptions over security [36] coupled with cognitive and motivational biases in the process can seriously distort the risk analysis inputs [37] and affect the quality of the analysis. ...
... Dans la plupart des cas, les discours des jeunes oscillent entre une rhétorique du retour en formation « subi » ou « choisi » sans se placer entièrement dans l'un des deux. Cette volonté de retour se fait face à une grande incertitude sur son avenir (Shafir & Tversky, 2003). ...
... There is reason to assume that likelihood as a form of psychological distance is particularly elusive to study. People are generally poor at dealing with probabilities and make erroneous judgments of likelihood in a variety of situations (Tversky & Kahneman, 2002). Therefore, it could be difficult to successfully manipulate subjective likelihood, making experimental manipulations such as those typically employed in CLT studies (e.g., 5 vs. 95% chance of performing a task) ineffective in changing people's perception of psychological distance. ...
... Studies have shown that investing in the stock market is an activity in which individuals tend to display a significant degree of overconfidence (Baker & Nofsinger, 2002). Despite the fact that the stock market is inherently unpredictable, even experts are more prone to overconfidence than novices (Griffin & Tversky, 1992). It is believed that individuals who possess a heightened sense of confidence in their investment capabilities may be more inclined to work as traders or actively manage their own investment portfolios, leading to a selection bias favouring overconfidence within the investor group. ...
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... Le diverse teorie dell'acquisto possono essere collocate in tre grandi paradigmi: 1) l'approccio cognitivo; 2) l'approccio di rinforzo; 3) l'approccio abitudinario. 59 Metodo di analisi del fenomeno giuridico che, oltre a utilizzare gli strumenti della microeconomia, utilizza i risultati provenienti dalla psicologia cognitiva. In particolare, esso studia il comportamento umano per riuscire a prevedere in che modo i soggetti rispondono agli incentivi posti dalle norme giuridiche. ...
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... Hansen and Jespersen [26] label these kind of nudges Type 2 nudges that work by attracting "relective attentionž. As an example they refer to the "ly-in-urinalž nudge [71] aimed to reduce spilling or the framing nudges that can afect relective choices via emotional responses based on automatic associations [35]. ...
... Turner et al. (2014) discussed the Lin-We use the terms judge, forecaster and expert interchangeably throughout the paper. ear Log Odds (LLO) recalibration function, which has been widely used to compensate the distortion of individual probability forecasts (Gonzalez & Wu, 1999;Tversky & Fox, 1995). The LLO transformation recalibrates the original probability p, by means of a linear transformation of the original log odds, to obtain the recalibrated value, : ...
... Therefore, CMTE will not be useful to explain the consumption pattern of traveling abroad. When the market price of a commodity deviates from its reference price, preference does not necessarily lead to a consumer choice [28]. Therefore, it leads to the following Hypothesis 2: ...
