How incidental values from the environment affect decisions about money, risk, and delay

Christoph Ungemach, Neil Stewart, Stian Reimers

Research output: Contribution to journalArticlepeer-review

48 Scopus citations

Abstract

How different are £0.50 and £1.50, "a small chance" and "a good chance," or "three months" and "nine months"? Our studies show that people behave as if the differences between these values are altered by incidental everyday experiences. Preference for a £1.50 lottery rather than a £0.50 lottery was stronger among individuals exposed to intermediate supermarket prices than among those exposed to lower or higher prices. Preference for "a good chance" rather than "a small chance" of winning a lottery was stronger among participants who predicted intermediate probabilities of rain than among those who predicted lower or higher chances of rain. Preference for consumption in "three months" rather than "nine months" was stronger among participants who planned for an intermediate birthday than among participants who planned for a sooner or later birthday. These fluctuations directly challenge economic accounts that translate monies, risks, and delays into subjective equivalents with stable functions. The decision-by-sampling model-in which subjective values are rank positions constructed from comparisons with samples-predicts these effects and indicates a primary role for sampling in decision making.

Original languageEnglish
Pages (from-to)253-260
Number of pages8
JournalPsychological Science
Volume22
Issue number2
DOIs
StatePublished - Feb 2011
Externally publishedYes

Keywords

  • decision by sampling
  • decision making under risk
  • decision weight
  • delay discounting
  • discounting function
  • intertemporal choice
  • subjective probability
  • utility

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