One proposed explanation for a particular kind of temporal preference lies in a disparity between the emotional intensity of memory compared to anticipation. According to the memory/anticipation disparity explanation, the utility of anticipation of a particular event if that event is future, whether positive or negative, is greater than the utility of retrospection of that same event if it is past, whether positive or negative, and consequently, overall utility is maximized when we prefer negative events to be located in the (...) past rather than the future, and positive ones in the future rather than the past. To have this preference is to be (at least apparently) future biased. If this explanation is correct, it would tend to confer rational justification upon these preferences. This paper empirically investigates this explanation. Our results suggest that, at most, this explanation might be a partial one of some people’s preferences some of the time, rather than a general explanation of future bias. In turn, this lends some indirect support to a competing explanation that appeals to temporal asymmetries in emotion and attention. Since that explanation would arguably tend not to confer rational justification upon (apparently) future-biased preferences, we argue that our findings provide some reason to be skeptical that these preferences are, in general, rationally justified. (shrink)

For a long time, the dominant approach to studying decision making under risk has been to use psychoeconomic functions to account for how behavior deviates from the normative prescriptions of expected value maximization. While this neo-Bernoullian tradition has advanced the field in various ways—such as identifying seminal phenomena of risky choice —it contains a major shortcoming: Psychoeconomic curves are mute with regard to the cognitive mechanisms underlying risky choice. This neglect of the mechanisms both limits the explanatory value of neo-Bernoullian (...) models and fails to provide guidance for designing effective interventions to improve decision making. Here we showcase a recent “attentional turn” in research on risk choice that elaborates how deviations from normative prescriptions can result from imbalances in attention allocation and that thus promises to overcome the challenges of the neo-Bernoullian tradition. We argue that a comprehensive understanding of preference formation in risky choice must provide an account on a mechanistic level, and we delineate directions in which existing theories that rely on attentional processes may be extended to achieve this objective. (shrink)

Most models of risky decision making assume that all relevant information is taken into account (e.g., Kahneman & Tversky, 1979; von Neumann & Morgenstern, 1944). However, there are also some models supposing that only part of the information is considered (e.g., Brandstätter, Gigerenzer, & Hertwig, 2006; Gigerenzer & Gaissmaier, 2011). To further investigate the amount of information that is usually used for decision making, and how the use depends on feedback, we conducted a series of three experiments in which participants (...) choose between two lotteries and where no feedback, outcome feedback, and error feedback was provided, respectively. The result show that without feedback participants mostly chose the lottery with the higher winning probability, and largely ignored the potential gains. The same result occurred when the outcome of each decision was fed back. Only after presenting error feedback (i.e., signaling whether a choice was optimal or not), participants considered probabilities as well as gains, resulting in more optimal choices. We propose that outcome feedback was ineffective, because of its probabilistic and ambiguous nature. Participants improve information integration only if provided with a consistent and deterministic signal such as error feedback. (shrink)

Social cues, such as being watched, can subtly alter fund investment choices. This study aimed to investigate how cues of being watched influence decision-making, attention allocation, and risk tendencies. Using decision scenarios adopted from the “Asian Disease Problem,” we examined participants’ risk tendency in a financial scenario when they were watched. A total of 63 older and 66 younger adults participated. Eye tracking was used to reveal the decision-maker’s attention allocation. The results found that both younger and older adults tend (...) to seek risk in the loss frame than in the gain frame. Watching eyes tended to escalate reckless gambling behaviors among older adults, which led them to maintain their share in the depressed fund market, regardless of whether the options were gain or loss framed. The eye-tracking results revealed that older adults gave less attention to the sure option in the eye condition. However, their attention was maintained on the gamble options. In comparison, images of “watching eyes” did not influence the risk seeking of younger adults but decreased their framing effect. Being watched can affect financial risk preference in decision-making. The exploration of the contextual sensitivity of being watched provides us with insight into developing decision aids to promote rational financial decision-making, such as human-robot interactions. Future research on age differences still requires further replication. (shrink)