Numerate decision makers don’t use more effortful strategies unless it pays: A process tracing investigation of skilled and adaptive strategy selection in risky decision making
Journal Title: Judgment and Decision Making - Year 2018, Vol 13, Issue 4
Abstract
The present study investigated skilled and adaptive strategy selection in risky decision making. We proposed that people with high objective numeracy, a strong predictor of general decision making skill, would have a broad repertoire of choice strategies and adaptively select these strategies depending on the importance of the decision. Thus more objectively numerate people would maximize their effort (e.g., invest more time) in important, high-payoff decisions and switch to a simple, fast heuristic strategy in trivial decisions. Subjective numeracy would, by contrast, be more closely related to interest in problem solving for its own sake and would not yield such an effect of importance. Participants made twelve high-payoff choices and twelve low-payoff choices in binary two-outcome gambles framed as gains. We measured objective and subjective numeracy using standard measures. Results showed that people with high subjective numeracy generally maximized the expected value (EV) in all decisions. In contrast, participants with high objective numeracy maximized EV only when choice problems were meaningful (i.e., they could result in high payoffs). When choice problems were trivial (i.e., choosing the normatively better option would not result in a large payoff), more objectively numerate participants made choices consistent with faster, more frugal heuristic strategies.
Authors and Affiliations
Jakub Traczyk, Agata Sobkow, Kamil Fulawka, Jakub Kus, Dafina Petrova and Rocio Garcia-Retamero
Keywords
Related Articles
- EP ID EP678368
- DOI -
- Views 136
- Downloads 0
The mean, the median, and the St. Petersburg paradox
The St. Petersburg Paradox is a famous economic and philosophical puzzle that has generated numerous conflicting explanations. To shed empirical light on this phenomenon, we examined subjects’ bids for one St. Petersburg...
Are markets more accurate than polls? The surprising informational value of “just asking”
Psychologists typically measure beliefs and preferences using self-reports, whereas economists are much more likely to infer them from behavior. Prediction markets appear to be a victory for the economic approach, having...
Deconstructing the seductive allure of neuroscience explanations
Previous work showed that people find explanations more satisfying when they contain irrelevant neuroscience information. The current studies investigate why this effect happens. In Study 1 (N=322), subjects judged psych...
The effects of total sleep deprivation on bayesian updating
Subjects performed a decision task (Grether, 1980) in both a well-rested and experimentally sleep-deprived state. We found two main results: 1) final choice accuracy was unaffected by sleep deprivation, and yet 2) the es...
American attitudes toward nudges
To successfully select and implement nudges, policy makers need a psychological understanding of who opposes nudges, how they are perceived, and when alternative methods (e.g., forced choice) might work better. Using two...