Observing others’ behavior and risk taking in decisions from experience
Journal Title: Judgment and Decision Making - Year 2008, Vol 3, Issue 7
Abstract
This paper examines how observing other people’s behavior affects risk taking in repeated decision tasks. In Study 1, 100 participants performed experience-based decision tasks either alone or in pairs, with the two members being exposed to each others’ choices and outcomes. The tasks involved either equiprobable gains and losses or frequent small gains and rare large losses. The results indicated that, in both risk types, the social exposure increased the proportion of risky selection, but its effect was stronger in the rare-loss condition. In Study 2 the rare-loss task was administered to 32 study participants, with a target individual observing the choices of a paired individual. The results showed that observing others, rather than being observed, led to the pattern of increased risk taking. The findings of the two studies indicate the importance of distinguishing different types of risky situations and shed light on contradictory findings in the literature.
Authors and Affiliations
Eldad Yechiam, Meir Druyan, and Eyal Ert
Keywords
Related Articles
- EP ID EP677650
- DOI -
- Views 149
- Downloads 0
A rose by any other name: A social-cognitive perspective on poets and poetry
Evidence, anecdotal and scientific, suggests that people treat (or are affected by) products of prestigious sources differently than those of less prestigious, or of anonymous, sources. The “products” which are the focus...
Forecasting forecasts: The trend effect
People often make predictions about the future based on trends they have observed in the past. Revised probabilistic forecasts can be perceived by the public as indicative of such a trend. In five studies, we describe ex...
Facing expectations: Those that we prefer to fulfil and those that we disregard
We argue that people choosing prosocial distribution of goods (e.g., in dictator games) make this choice because they do not want to disappoint their partner rather than because of a direct preference for the chosen pros...
Deception and price in a market with asymmetric information
In markets with asymmetric information, only sellers have knowledge about the quality of goods. Sellers may of course make a declaration of the quality, but unless there are sanctions imposed on false declarations or rep...
Trust and self-control: The moderating role of the default
According to recent dual-process theories, interpersonal trust is influenced by both impulsive and deliberative processes. The present research explores the determinants of deliberative trust, investigating how trust dec...