Despite ample evidence that numeracy is an important influence on patient understanding and use of health-related information, there is a dearth of studies examining the concept's relationship to other individual differences measures that may underlie complex judgments in the health domain. In this study, we compared the relative contributions of selected extant numeracy measures and general intelligence and other measures to varied judgment and decision-making outcomes. Two hundred participants completed numeracy items, subscales of the Wechsler Adult Intelligence Scales, the need for cognition scale, and four relevant outcome measures including risk estimation and medical data interpretation. A numeracy scale constructed using item response and confirmatory factor analyses was consistently the strongest predictor across all outcome measures and accounted for unique variance over and above general intelligence. The results support the concept of numeracy as an independent construct that merits consideration in patient communication. Copyright © 2013 John Wiley & Sons, Ltd.

In three studies, we examined the influence of restricted and expansive temporal horizons on the sunk-cost fallacy. The sunk-cost fallacy occurs when prior investments instead of future returns influence decisions about future investments. When making decisions about future investments, rational decision makers base decisions on future consequences, not already-invested costs that are “sunk” and cannot be recovered. In Study 1, we restricted young adult college students' temporal horizons by instructing them to imagine that they did not have much longer to live; this manipulation decreased the sunk-cost fallacy. In Study 2, we replicated Study 1 and also found that the consequences of manipulating temporal horizons were most pronounced for prior investments of time and that prior investments of time and money had different implications for the sunk-cost fallacy, depending on the social or nonsocial decision domain. In Study 3, we manipulated temporal horizons by instructing students to imagine their time as a college student was coming to an end. Results were mostly similar to Study 2 but also suggested that focusing on one's mortality may have unique consequences. Implications of the three studies for understanding age differences in sunk-cost decisions, interventions to improve sunk-cost decisions, and the situations in which interventions might be most needed are discussed. Copyright © 2013 John Wiley & Sons, Ltd.

How do you respond when receiving advice from somebody with the argumentation “my gut tells me so” or “this is what my intuition says”? Most likely, you would find this justification insufficient and disregard the advice. Are there also situations where people do appreciate such intuitive advice and change their opinion accordingly? A growing number of authors write about the power of intuition in solving problems, showing that intuitively made decisions can be of higher quality than decisions based on analytical reasoning. We want to know if decision makers, when receiving advice based on an intuitive cognitive process, also recognize the value of such advice. Is advice justified by intuition necessarily followed to a lesser extent than an advice justified by analysis? Furthermore, what are the important factors influencing the effect of intuitive justification on advice taking? Participants across three studies show that utilization of intuitive advice varies depending on advisor seniority and type of task for which the advice is given. Summarizing, the results suggest that decision makers a priori doubt the value of intuitive advice and only assess it as accurate if other cues in the advice setting corroborate this. Intuitively justified advice is utilized more if it comes from a senior advisor. In decision tasks with experiential products, intuitively justified advice can even have more impact than analytically justified advice. Copyright © 2013 John Wiley & Sons, Ltd.

At the present time, the growing interest in the topic of moral judgment highlights the widespread need for a standardized set of experimental stimuli. We provide normative data for a sample of 120 undergraduate students using a new set of 60 moral dilemmas that might be employed in future studies according to specific research needs. Thirty dilemmas were structured to be similar to the Footbridge dilemma (“instrumental” dilemmas, in which the death of one person is a means to save more people), and thirty dilemmas were designed to be similar to the Trolley dilemma (“incidental” dilemmas, in which the death of one person is a foreseen but unintended consequence of the action aimed at saving more people). Besides type of dilemma, risk-involvement was also manipulated: the main character's life was at risk in half of the instrumental dilemmas and in half of the incidental dilemmas. We provide normative values for the following variables: (i) rates of participants' responses (yes/no) to the proposed resolution; (ii) decision times; (iii) ratings of moral acceptability; and (iv) ratings of emotional valence (pleasantness/unpleasantness) and arousal (activation/calm) experienced during decision making. For most of the dependent variables investigated, we observed significant main effects of type of dilemma and risk-involvement in both subject and item analyses. Copyright © 2013 John Wiley & Sons, Ltd.

Recent studies show that, while losses loom larger than equivalent non-gains, gains loom larger than equivalent non-losses. This finding has been interpreted within the framework of regulatory focus theory. In this study, we highlight the importance of considering the motivational focus independently of the framing and the valence of outcome, thus exploring the causal effect of regulatory focus on the asymmetric perception of gains versus non-losses and losses versus non-gains. In two studies, we examine the perceived effects of either actual or hypothetical changes in monetary wealth, while orthogonally manipulating framing, valence, and regulatory focus. We find a significant interaction between the three factors. The gain versus non-loss asymmetry in perceived satisfaction is stronger in promotion focus, whereas the loss versus non-gain asymmetry in perceived dissatisfaction is stronger in prevention focus. The results suggest that the effects of incentives framed in terms of (non)gains and (non)losses depend on their congruence with the individual's motivational state. Copyright © 2013 John Wiley & Sons, Ltd.

The proportion dominance effect (PDE) refers to a higher motivation to help when the victims are part of a small (you can help 56 out of 60) rather than a large (you can help 56 out of 560) reference group. In two studies using different experimental paradigms, we investigated possible mediators of the PDE. Study 1 (N = 168) was conducted in three separate steps in order to test each link of the mediator model independently. Students read six vignettes where it was possible to help a fixed number of victims but where the size of the reference group was either small or large. When the reference group was small, helping motivation and perceived utility were higher, whereas sympathy toward the victims and perceived rights were not. A within-subject mediation analysis showed that perceived utility mediated the PDE. Study 2 (N = 36) presented four versions of a single helping situation in a joint evaluation mode where the size of the reference group became gradually smaller in each version. All participants compared and responded to each version. Helping motivation increased as the reference group became smaller, and this effect was mediated by perceived utility rather than by distress, sympathy, or perceived responsibilities. Our results suggest that unlike, for example, the identifiability and singularity effects, which have been suggested to be mediated by emotional reactions, the PDE is mediated by perceived utility. Copyright © 2013 John Wiley & Sons, Ltd.

To represent the state-of-the-art in an effort to understand the relation between personality and risk taking, we selected a popular decision task with characteristics that parallel risk taking in the real world and two personality traits commonly believed to influence risk taking. A meta-analysis is presented based on 22 studies of the Balloon Analogue Risk Task from which correlations with sensation seeking and impulsivity assessments could be obtained. Results calculated on a total of 2120 participants showed that effect size for the relation of sensation seeking with risk taking was in the small–moderate range ( = .14), whereas the effect size for impulsivity was just around the small effect size threshold ( = .10). Although we considered participants' demographics as moderators, we found only significantly larger effect sizes for the older adolescents and young adults compared with other ages. The findings of the present review supported the view that inconsistencies in personality–risk research were mostly due to random fluctuations of specific effect sizes, rather than to lack of theoretical ties or to measurement unreliability. It is also concluded that studies aimed at relating individual differences in personality to performance in experimental decision tasks need an appropriate sample size to achieve the power to produce significant results. Copyright © 2013 John Wiley & Sons, Ltd.

The present study investigated how trait anxiety influenced the formation of a self-frame and decision making. Participants (N = 1044) responded to the Trait Anxiety Inventory. Those with trait anxiety scores ±1 Z score from the sample mean (N = 328) were recalled to respond to the self-frame questionnaire. The results suggested that trait anxiety differences could result in differences in the editing of decision-making information, thereby influencing the risky choice. Compared with the low trait anxiety group, participants from the high trait anxiety group showed a greater tendency to use negative vocabulary to construct their self-frame and tended to choose conservative plans. Self-frame suppressed the influence of trait anxiety on decision making. These results further confirmed the hypothesis that individual differences in personality traits might influence the processing of information in a framed decision task. Copyright © 2013 John Wiley & Sons, Ltd.

Every day we use products and treatments with unknown but expected effects, such as using medication to manage pain. In many cases, we have a choice over which products or treatments to use; however, in other cases, people choose for us or choices are unavailable. Does choosing (versus not choosing) have implications for how a product or treatment is experienced? The current experiments examined the role of choice-making in facilitating so-called expectation assimilation effects—or situations in which a person's experiences (e.g., discomfort and pain) are evaluated in a manner consistent with their expectations. In Experiment 1, participants were initially exposed to a baseline set of aversive stimuli (i.e., sounds). Next, some participants were given expectations for two “treatments” (i.e., changes in screen display) that could ostensibly reduce discomfort. Critically, participants were either given a choice or not about which of the two treatments they preferred. Participants in a control condition were not provided with treatment expectations. Results revealed that discomfort experiences assimilated to expectations only when participants were provided with choice. Experiment 2 replicated this finding and provided evidence against the idea that demand characteristics and choice-making unrelated to the core task (i.e., choices without associated expectations) could account for the results. Further, Experiment 2 showed that choosing reduced discomfort because of increased positivity about the treatment. Results are discussed in the context of extant research on choice-making and expectation effects. Copyright © 2013 John Wiley & Sons, Ltd.

It is commonly assumed that the use of simple, non-compensatory strategies is especially pronounced in memory-based decisions, where information costs are high. At the same time, there is evidence that in memory-based decisions, a compensatory processing of attributes is facilitated when the processing occurs unconsciously rather than consciously. We applied a strategy classification approach—developed in research on non-compensatory heuristics—to test two key tenets of unconscious thought theory: the capacity principle and the weighting principle. Participants memorized attribute information about cars and were subsequently either directed to or diverted from thinking consciously about their preferences between the cars (conscious versus unconscious thought). Then, participants indicated in pair-wise choices which car they would prefer and were classified (based on their choices) as using either one of two compensatory strategies (equal weight or weighted additive) or a non-compensatory strategy (lexicographic heuristic). In line with the capacity principle, the number of participants best described by a compensatory strategy (the equal-weight strategy) tended to be higher after unconscious thought than after conscious thought, whereas the number of participants best described by the lexicographic heuristic tended to be lower. Inconsistent with the weighting principle, participants in the unconscious thought condition were better described by the equal-weight strategy than by the weighted-additive strategy. In Experiment 2, in which participants were not instructed to form an impression while learning the attribute information, the use of the equal-weight strategy was not more prevalent after unconscious thought. Copyright © 2013 John Wiley & Sons, Ltd.

We investigate what processes may underlie heterogeneity in social preferences. We address this question by examining participants' decisions and associated response times across 12 mini-ultimatum games. Using a finite mixture model and cross-validating its classification with a response time analysis, we identified four groups of responders: one group takes little to no account of the proposed split or the foregone allocation and swiftly accepts any positive offer; two groups process primarily the objective properties of the allocations (fairness and kindness) and need more time the more properties need to be examined; and a fourth group, which takes more time than the others, appears to take into account what they would have proposed had they been put in the role of the proposer. We discuss implications of this joint decision–response time analysis. Copyright © 2013 John Wiley & Sons, Ltd.

Phantoms are dominating, attractive alternatives that are unavailable at the time of choice. They occupy different positions in the attribute space, and their unavailability can be either known or unknown to individuals. Although different theories have offered explanations for the influence that phantoms exert on individual choices, they have largely overlooked phantom knowledge. Contradictory predictions can be drawn from these theories, and none provides a good account of the pattern of effects that emerges from our data. We suggest that these contradictions appear because the different theories do not address phantom location and knowledge jointly. When considering phantom knowledge together with location, we observe a consistent overall pattern of effects that encompasses all predictions that could be made on the basis of each theory. We find that known phantoms are stronger when close, and favor the target product, whereas unknown phantoms are stronger when far, and favor the competitor. Finally, we look beyond shifts in choice shares and find that phantom decoys can also affect individuals' post-choice evaluations and reactions in terms of perceived justice, decision satisfaction, and repatronage intention. Our results show that post-choice evaluations are driven by phantom knowledge, not phantom location. Copyright © 2012 John Wiley & Sons, Ltd.

Gambling near-misses are non-rewarded events that resemble a winning configuration. Past research using slot machines has shown that moderate rates of near-misses increase gambling persistence, but the mechanisms supporting this persistence are unclear. One hypothesis is that near-misses are mistakenly interpreted as signals of skill acquisition, supporting learning and fuelling the ‘illusion of control’. A slot machine simulation was administered to 60 volunteers, with ratings of the perceived chances of winning, pleasure and motivation to play following particular outcomes. Psychophysiological measures (electrodermal activity and heart rate) were taken, and gambling persistence was measured after 30 trials. Near-misses were similar to full-miss outcomes in that they were regarded as unpleasant. However, near-misses were akin to win outcomes in that they increased motivations to play and electrodermal activity. Learning was evidenced by the expectancy of winning increasing following wins and decreasing after losses. Although there was no overall change in expectancy of winning after near-misses across all participants, those subjects reporting a greater increase in the expectancy of winning following a near-miss showed more persistent play, consistent with the learning hypothesis. Greater heart rate acceleration following near-misses was also associated with persistence. We also observed differential effects of near-misses where the reel stopped either side of the winning position (‘payline’): motivational effects were restricted to near-misses stopping before the payline, whereas near-misses that stopped after the payline were primarily aversive. The payline effects are not predicted by the learning hypothesis and may indicate an affective component to near-misses, possibly linked to counterfactual processing. Copyright © 2012 John Wiley & Sons, Ltd.

What are the cognitive processes underlying people's decisions from memory? Previous research suggests that these processes can be best described by strategies that are based on abstract knowledge about the decision task (e.g., cue–criterion relations). However, recent results show that different cue presentation formats trigger the use of different decision strategies and that exemplar-based strategies can account for memory-based decisions as well. In three experiments, this effect was replicated, and mediation analyses identified the quality of the underlying knowledge representation as the critical variable that determines decision behavior. This supports the view that exemplar-based reasoning is used as a backup system if cue abstraction is hindered. Copyright © 2012 John Wiley & Sons, Ltd.

Rubinstein and Leland have both demonstrated that many observed violations of expected and discounted utility can be explained if people employ similarity judgments to make choices. In this paper, I show that this decision process also explains which equilibria will be selected in single-shot games with multiple equilibria and implies that play in games will be associated with anomalies in risky choice. Data supporting these predictions are presented. Copyright © 2012 John Wiley & Sons, Ltd.

Overconfidence is often regarded as one of the most prevalent judgment biases. Several studies show that overconfidence can lead to suboptimal decisions of investors, managers, or politicians. Recent research, however, questions whether overconfidence should be regarded as a bias and shows that standard “overconfidence” findings can easily be explained by different degrees of knowledge of agents plus a random error in predictions. We contribute to the current literature and ongoing research by extensively analyzing interval estimates for knowledge questions, for real financial time series, and for artificially generated charts. We thereby suggest a new method to measure overconfidence in interval estimates, which is based on the implied probability mass behind a stated prediction interval. We document overconfidence patterns, which are difficult to reconcile with rationality of agents and which cannot be explained by differences in knowledge as differences in knowledge do not exist in our task. Furthermore, we show that overconfidence measures are reliable in the sense that there exist stable individual differences in the degree of overconfidence in interval estimates, thereby testing an important assumption of behavioral economics and behavioral finance models: stable individual differences in the degree of overconfidence across people. We do this in a “field experiment,” for different levels of expertise of subjects (students on the one hand and professional traders and investment bankers on the other hand), over time, by using different miscalibration metrics, and for tasks that avoid common weaknesses such as a non-representative selection of trick questions. Copyright © 2012 John Wiley & Sons, Ltd.

A fundamental assumption of prospect theory is gain–loss separability (GLS)—the assertion that the overall utility of a prospect can be expressed as a function of the utilities of its positive and negative components. Violations of GLS may potentially limit the generalization of results from studies of single-domain prospects to mixed prospects and systematically distort the predictions of the theory. Violations also have implications for how choices with positive and negative components should be presented to decision makers. Previous studies, using different elicitation methods, have documented different rates, and types, of systematic violations of GLS. We discuss the differences between two specific elicitation methods—binary choice and certainty equivalents—and report results of a new study of GLS using both methods and randomly generated prospects. We compare the extent and nature of GLS violations under the two elicitation methods using between-subject and within-subject analyses. We find (i) systematic violations of GLS under both methods, (ii) higher rates of violations under choice, (iii) higher sensitivity to the outcomes for the certainty equivalents, which is consistent with the predictions of the scale-compatibility hypothesis, and (iv) different patterns of violations under the two methods, which are explained by method-specific preferences. We discuss the psychological mechanisms underlying the findings and the implications for presenting information with gain and loss components. Copyright © 2012 John Wiley & Sons, Ltd.

Standard economic models assume people exclusively pursue material self-interests in social interactions. However, people exhibit social preferences; that is, they base their choices partly on the outcomes others obtained in a social interaction. People care about fairness, and reciprocity affects behavior. This study examines the differences in negative reciprocity (costly punishment for unfair divisions) as a function of age. Sixty-one kindergarteners (5-year-olds), 53 second graders (8-year-olds), and 57 sixth graders (12-year-olds) played a dictator game or a mini–ultimatum game either with a human proposer or with a random machine that determined the division between the two players. By keeping the divisions between the players constant and varying the source of the unfair proposal, we were able to differentiate between reciprocity-based and inequality-aversion preferences. We found that kindergarteners proposed and accepted unfair divisions regardless of the source of the offer, behaving according to the standard economic model. Children in the sixth grade tended to reject unfair offers from a human proposer but accept unfair divisions from a random device, indicating the emergence of negative reciprocity preferences by age eight (and contrary to inequality aversion). Children at this age also tended to give more fair offers in the ultimatum game than in the dictator game, indicating the emergence of strategic thinking. Copyright © 2012 John Wiley & Sons, Ltd.

The outcomes in many competitive tasks depend upon both skill and luck. Behavioral theories on risk taking in tournaments indicate that low-skilled individuals may have incentives to take more risks than high-skilled ones. We build on these theories and suggest, in addition, that when luck is more important in determining outcomes, the increase in risk taking is larger for low-skilled than high-skilled individuals. We test this hypothesis by analyzing stock analysts' forecasts of companies' earnings per share under market conditions that vary in volatility and thus imply different levels of luck in outcomes. Specifically, noting that forecasts that deviate widely from the consensus—which is observable by the analyst—potentially carry career-related rewards but also reputational risks, we examine the degree of deviation from consensus exhibited by analysts of different skill levels (measured by both past forecasting accuracy and education) in different market conditions. We find that average deviations from consensus increase as markets become more volatile. At the same time, under conditions of high volatility, low-skilled analysts exhibit larger increases in deviations from consensus than high-skilled analysts. These field data results support our hypothesis based on of risk taking in tournaments. We discuss alternative interpretations such as, for example, self-serving attributions and indicate directions for future research. Copyright © 2012 John Wiley & Sons, Ltd.

Many personal, managerial, and societal decisions involve uncertain or ambiguous consequences that will occur in the future. Yet, previous empirical research on ambiguity preferences has focused mainly on decisions with immediate outcomes. To close this gap in the literature, this paper examines ambiguity attitudes toward future prospects, particularly how they may differ from the attitudes toward comparable prospects in the present. On the basis of a recent paradigm, we first distinguish between two types of ambiguity: imprecise probabilities and imprecise outcomes. Then, in accordance with construal level theory, which shows that temporal distance increases the relative importance of outcomes over probabilities in evaluating prospects, we conjecture that temporal distance would moderate attitudes toward imprecise probabilities but amplify attitudes toward imprecise outcomes. Through a series of experiments, we demonstrate that when the prospects are in the future, individuals are less averse toward imprecise probabilities and more seeking toward imprecise outcomes. However, the effect is most prominent for prospects where both the probability and outcome dimensions are concurrently imprecise. The paper ends with a discussion on how dimension salience may have contributed to this result. Copyright © 2012 John Wiley & Sons, Ltd.

Intertemporal tradeoffs are ubiquitous in decision making, yet preferences for current versus future losses are rarely explored in empirical research. Whereas rational-economic theory posits that neither outcome sign (gains vs. losses) nor outcome magnitude (small vs. large) should affect delay discount rates, both do, and moreover, they interact: in three studies, we show that whereas large gains are discounted less than small gains, large losses are discounted more than small losses. This interaction can be understood through a reconceptualization of fixed-cost present bias, which has traditionally described a psychological preference for immediate rewards. First, our results establish present bias for losses—a psychological preference to have losses over with now. Present bias thus predicts increased discounting of future gains but decreased (or even negative) discounting of future losses. Second, because present bias preferences do not scale with the magnitude of possible gains or losses, they play a larger role, relative to other motivations for discounting, for small magnitude intertemporal decisions than for large magnitude intertemporal decisions. Present bias thus predicts less discounting of large gains than small gains but more discounting of large losses than small losses. The present research is the first to demonstrate that the effect of outcome magnitude on discount rates may be opposite for gains and losses and also the first to offer a theory (an extension of present bias) and process data to explain this interaction. The results suggest that policy efforts to encourage future-oriented choices should frame outcomes as large gains or small losses. Copyright © 2012 John Wiley & Sons, Ltd.

The current research examines tacit coordination behavior in a lottery selection task. Two hundred participants in each of three experiments and 100 in a fourth choose to participate in one of two lotteries, where one lottery has a larger prize than the other. Independent of variations in the complexity of the mechanism of prize allocation, the prize amounts, and whether the lottery is the participant's first or second choice, we typically find that the percentage of participants who choose the high versus low-prize lotteries does not significantly differ from the equilibrium predictions. This coordination is achieved without communication or experience. We additionally find that participants with an analytical thinking style and a risk-averse tendency are more likely to choose the low-prize lottery over the high-prize lottery. This tendency seems to be stable across choices. The pattern of our results suggests that to achieve tacit coordination, having a subset of individuals who attend to the choices of others is sufficient. Copyright © 2012 John Wiley & Sons, Ltd.

People's decisions shape their experience. For example, a recruitment officer decides between job applicants and cannot evaluate the suitability of rejected applicants. The selection decisions thus affect the content of the officer's experience of suitable and unsuitable applicants, and experiential learning is achieved from a selective sample of experiences. It is suggested that people's beliefs are sensitive to the content of the experienced sample, but the mind cannot adjust for the selectivity of the sample even when it results from the individual's own decisions. Two experiments with a recruitment task showed that incorrect prior beliefs survive experiential learning when the beliefs are reproduced and thus appear to be confirmed, in actual experience. When the task was to achieve high performance, incorrect prior beliefs persisted because they were reproduced in a smaller sample of selected job applicants. In contrast, when the task was focused on learning, a greater number of applicants were selected, and a more representative experience therefore revised incorrect beliefs. The actual content of the experienced sample is thus crucial for the persistence, as well as for the revision, of incorrect beliefs. Further, as predicted by the hypothesis of constructivist coding, when feedback was absent for rejected applicants, participants constructed “internal feedback” in line with the expectation that the rejected applicant was unsuitable. Thus, when fewer applicants were hired, participants came to believe that the actual proportion of suitable applicants was low. Finally, the implications for efforts to reduce bias and improve experiential learning are discussed. Copyright © 2012 John Wiley & Sons, Ltd.

In this paper, we examine the role of personal agency as a key antecedent of regret that individuals experience when the outcome of their decision is unfavorable. In contrast to previous research that documents its exacerbating role, we find that personal agency mitigates regret under certain circumstances. A series of experimental studies show that personal responsibility for the decision may attenuate subjective perceptions of the extent of failure and mitigate regret. However, when the superior outcome of the foregone option is known and the failure of the chosen option is irreversible, personal agency may amplify regret. We also find that subjective failure perceptions mediate the relationship between personal agency and regret levels. Copyright © 2012 John Wiley & Sons, Ltd.

Nostalgic preferences are widespread—people believe past movies, music, television shows, places, and periods of life to have been better than their present counterparts. Three experiments explored the cognitive underpinnings of nostalgic preferences. Participants rated past experiences to have been superior to similar present and recent experiences. These nostalgic preferences appeared to be due to the belief that the atypically positive experiences that participants recalled at the time of judgment were more representative of their past experiences than of their present experiences. Copyright © 2012 John Wiley & Sons, Ltd.

When deciding for whom to vote, voters should select the candidate they expect to best handle issues, all other things equal. A simple heuristic predicted that the candidate who is rated more favorably on a larger number of issues would win the popular vote. This was correct for nine out of ten U.S. presidential elections from 1972 to 2008. We then used simple linear regression to relate the incumbent's relative issue ratings to the actual two-party popular vote shares. The resulting model yielded out-of-sample forecasts that were competitive with those from the Iowa Electronic Markets and established quantitative models. The issue-index model has implications for political decision makers, as it can help to track campaigns and to decide which issues to focus on. Copyright © 2012 John Wiley & Sons, Ltd.

What produces better judgments: deliberating or relying on intuition? Past research is inconclusive. We focus on the role of expertise to increase understanding of the effects of judgment mode. We propose a framework in which expertise depends on a person's experience with and knowledge about a domain. Individuals who are relatively experienced but have modest knowledge about the subject matter (“intermediates”) are expected to suffer from deliberation and to benefit from a more intuitive approach, because they lack the formal knowledge to understand the reasons underlying their preferences. Individuals who are high (“experts”) or low (“novices”) on both experience and knowledge are expected to do well or poorly, respectively, regardless of decision mode. We tested these predictions in the domain of art. Experiments 1 and 2 showed that intermediates performed better when relying on intuition than after deliberation. Judgments of experts and novices were unaffected. In line with previous research relating processing style to judgment mode, Experiment 3 showed that the effect of processing style (global versus local) on judgment quality is similarly moderated by expertise. Copyright © 2012 John Wiley & Sons, Ltd.

Criminal procedure is organized as a tournament with predefined roles. We show that assuming the role of a defense counsel or a prosecutor leads to role-induced bias even if participants are asked to predict a court ruling after they have ceased to act in that role and if they expect a substantial financial incentive for being accurate. The bias is not removed either if participants are instructed to predict the court ruling in preparation of plea bargaining. In line with parallel constraint satisfaction models for legal decision making, findings indicate that role-induced bias is driven by coherence effects, that is, systematic information distortions in support of the favored option. This is mainly achieved by downplaying the importance of conflicting evidence. These distortions seem to stabilize interpretations, and people do not correct for this bias. Implications for legal procedure are briefly discussed. Copyright © 2012 John Wiley & Sons, Ltd.

Real-world decisions often involve options with outcomes that are uncertain and trigger strong affect (e.g., side effects of a drug). Previous work suggests that when choosing among affect-rich risky prospects, people are rather insensitive to probability information, potentially compromising decision quality. We modeled the strategies of less and more numerate participants in the United States and in Germany when choosing between affect-rich prospects and between monetarily equivalent affect-poor prospects. Using large probabilistic national samples (n = 1047 from the United States and Germany), Study 1 showed that compared with more numerate participants, less numerate participants chose the normatively better option (i.e., the one with the higher expected value) less often, guessed more often, and relied more on a simple risk-minimizing strategy. U.S. participants—although less numerate—selected the normatively better option more frequently and were more consistent across affect-rich and affect-poor problems than the German participants. Using a targeted quota sample (n = 118 from Germany), Study 2 indicated that although both more and less numerate participants paid less attention to probability information in affect-rich than in affect-poor problems, the two numeracy groups relied on different outcome-based heuristics: More numerate participants often followed the minimax heuristic, and less numerate participants the affect heuristic. The observed strategy differences suggest that attempts to improve decision-making need to take into account individual differences in numeracy as well as cultural-specific experiences in making trade-offs. Copyright © 2012 John Wiley & Sons, Ltd.

Mechanical Turk (MTurk), an online labor system run by Amazon.com, provides quick, easy, and inexpensive access to online research participants. As use of MTurk has grown, so have questions from behavioral researchers about its participants, reliability, and low compensation. In this article, we review recent research about MTurk and compare MTurk participants with community and student samples on a set of personality dimensions and classic decision-making biases. Across two studies, we find many similarities between MTurk participants and traditional samples, but we also find important differences. For instance, MTurk participants are less likely to pay attention to experimental materials, reducing statistical power. They are more likely to use the Internet to find answers, even with no incentive for correct responses. MTurk participants have attitudes about money that are different from a community sample's attitudes but similar to students' attitudes. Finally, MTurk participants are less extraverted and have lower self-esteem than other participants, presenting challenges for some research domains. Despite these differences, MTurk participants produce reliable results consistent with standard decision-making biases: they are present biased, risk-averse for gains, risk-seeking for losses, show delay/expedite asymmetries, and show the certainty effect—with almost no significant differences in effect sizes from other samples. We conclude that MTurk offers a highly valuable opportunity for data collection and recommend that researchers using MTurk (1) include screening questions that gauge attention and language comprehension; (2) avoid questions with factual answers; and (3) consider how individual differences in financial and social domains may influence results. Copyright © 2012 John Wiley & Sons, Ltd.

The first aim of this study was to test the self-consistency model (SCM) of subjective confidence as it applies to personal preferences. According to SCM, participants presented with a two-alternative forced-choice (2AFC) item draw a small sample of representations of the item. Their confidence reflects the extent to which the choice is representative of the population of representations associated with the item, and the likelihood of making that choice on subsequent occasions. The second aim was to use confidence judgment as a clue to the dynamics of online preference construction. Participants were presented with 2AFC items measuring everyday personal preferences. The task was presented five times. In line with SCM, (i) when participants changed their preferences across presentations, they were systematically more confident when they made their more frequent choice; (ii) confidence in a choice in the item's first presentation predicted the likelihood of repeating that choice in subsequent presentations; (iii) despite the idiosyncratic nature of personal preferences, confidence was higher for consensual than for nonconsensual preferences; (iv) when participants predicted the preferences of others, they were also more confident when their predictions agreed with those of others; and (v) the confidence/accuracy correlation for predictions was positive for consensually correct but negative for consensually wrong predictions. These results suggest that confidence in preferences can help separate between the stable and variable contributions to preference construction in terms of the population of representations available in memory and the representations that are accessible at the time of preference solicitation, respectively. Copyright © 2012 John Wiley & Sons, Ltd.

Two studies examined semantic coherence and internal inconsistency fallacies in conditional probability estimation. Problems reflected five distinct relationships between two sets: identical sets, mutually exclusive sets, subsets, overlapping sets, and independent sets (a special case of overlapping sets). Participants estimated P(A), P(B), P(A|B), and P(B|A). Inconsistency occurs when this constellation of estimates does not conform to Bayes' theorem. Semantic coherence occurs when this constellation of estimates is consistent with the depicted relationship among sets. Fuzzy-trace theory predicts that people have difficulty with overlapping sets and subsets because they require class-inclusion reasoning. On these problems, people are vulnerable to denominator neglect, the tendency to ignore relevant denominators, making the gist more difficult to discern. Independent sets are simplified by the gist understanding that P(A) provides no information about P(B), and thus, P(A|B) = P(A). The gist for identical sets is that P(A|B) = 1.0, and the gist of mutually exclusive sets is that P(A|B) = 0. In Study 1, identical, mutually exclusive, and independent sets yielded superior performance (in internal inconsistency and semantic coherence) than subsets and overlapping sets. For subsets and overlapping sets, interventions clarifying appropriate denominators generally improved semantic coherence and inconsistency, including teaching people to use Euler diagrams, 2 × 2 tables, or relative frequencies. In Study 2, with problems about breast cancer and BRCA mutations, there was a strong correlation between inconsistency in conditional probability estimation and conjunction fallacies of joint probability estimation, suggesting that similar fallacious reasoning processes produce these errors. Copyright © 2012 John Wiley & Sons, Ltd.

In a typical risky choice framing task, people have to choose among two options, which are either positively or negatively framed. Choices in the two framing conditions are then compared. However, different preferences between the conditions can be due to changes in the evaluation of the single constituent options or due to specific processes triggered by the choice task. In order to clarify the source of the framing effect, we investigate the effect with different response modes: choice, rating, and ranking. The rating and ranking findings indicate that what is commonly called a risky choice framing effect is actually a framing effect that changes the evaluation of only the riskless option, although there is little or no effect on the risky option. According to these findings, risky choice framing might be construed as a process of attribute framing, which is independent of risk preference in choice contexts. Copyright © 2011 John Wiley & Sons, Ltd.

Delayed rewards are less valuable than immediate rewards. This well-established finding has focused almost entirely on individual outcomes. However, are delayed rewards similarly discounted if they are shared by a group? The current article reports on three experiments exploring the effect of group context on delay discounting. Results indicate that discount rates of individual and group rewards were highly correlated, but that respondents were more willing to wait (decreased discounting) for shared outcomes than for individual outcomes. An explanatory model is proposed suggesting that decreased discount rates in group contexts may be due to the way the effects of both delay and social discounting are combined. That is, in a group context, a person values both a future reward (discounted by delay) and a present reward to another person (discounted by the social distance between them). The results are explained by a combined discount function containing a delay factor and a factor representing the social distance between the decision maker and group members. Practical implications of the fact that shared consequences can increase individual self-control are also discussed. Copyright © 2011 John Wiley & Sons, Ltd.

We demonstrate that citizens perceive a duty to support policies that benefit their nation, even when they themselves judge that the consequences of the policies will be worse on the whole, taking outsiders into account. In terms of actions, subjects think they would do their perceived duty rather than violate it for the sake of better consequences. The discrepancy between duty and judged consequences does not seem to result from self-interest alone. When asked for reasons, many subjects felt an obligation to help their fellow citizens before others, and they also thought that they owed something to their nation, in return for what it did for them. The obligation to help fellow citizens was the strongest predictor of perceived duty. In an experiment with Israeli and Palestinian students, group membership affected both perceived overall consequences and duty, but the effect of group on perceived consequences did not account for the effect on perceived duty. Copyright © 2011 John Wiley & Sons, Ltd.

We examined the consequences of personal savings estimate inflation that occurs when decision makers provide savings estimates for specific future months when compared with the next month or the next year time frames, along with a method to attenuate this bias. The results of three experiments showed that the savings estimate inflation leads to significantly larger estimates of desired nest egg size (Experiment 1) and preference for riskier choices in other financial domains such as investment and employment decisions (Experiment 2). An attempt to attenuate this bias revealed that it is corrected when individuals provide a budgeting estimate prior to giving a savings estimate (Experiment 3). The theoretical and practical implications of the findings are discussed. Copyright © 2012 John Wiley & Sons, Ltd.

The decision strategy used to select a choice set from an array of alternative options is known to affect the composition of the final choice set. Specifically, individuals incorporate more answers into their choice set when it is created by eliminating implausible items than when the set is created through the inclusion of plausible options. This difference is accounted for in a decision framework that posits a general reluctance to change the status quo (i.e., actively include or exclude an item). We extended this work to investigate, not only the decisions themselves, but also metacognitive judgments (i.e., confidence in the accuracy of the choice set). In two face recognition experiments, we tested the impact of decision strategy (Experiment 1) and confidence judgment strategy (Experiment 2) on the confidence–accuracy relationship. In Experiment 1, participants completed two blocks of recognition trials, one under inclusion (marking previously seen faces) and one under elimination (marking previously unseen faces) instructions. We observed superior resolution (i.e., discrimination between correct and incorrect) for inclusion trials, but only when they were completed prior to use of the elimination strategy. In Experiment 2, all participants completed face recognition trials under inclusion instructions, but we manipulated the strategy used to assess confidence. Again, we observed a significant impact of strategy on confidence–accuracy resolution. Thus, we observed that both the strategy employed to reach a decision and that employed to assess confidence affected the confidence–accuracy relationship. We discuss theoretical and applied (particularly for eyewitness identification and multiple-choice testing) implications. Copyright © 2012 John Wiley & Sons, Ltd.

Numeracy or one's ability to appropriately process and use numerical information has been shown to be an important individual difference factor in decision making. The current study utilized a risky decision-making task (called the “cups task”) in which choices are made to both earn and avoid losing hypothetical money. Critically, this design allowed investigators to examine numeracy-related differences in adaptive decision-making as measured by sensitivity to expected value (EV) differences over 54 paired-choice trials—some in which it was advantageous to take a risk and some in which it was not. Results showed that in an undergraduate sample of 114 individuals, the less numerate took more risks and were less sensitive to varying EV levels than the more numerate, especially when it was disadvantageous to take a risk and when the choice involved a potential loss (rather than a gain). These results are consistent with a dual processing account in which the more numerate are much better than the less numerate at extracting the precise affective “gist” of the numerical information, which is then used to determine the goodness or badness of a particular choice. Copyright © 2012 John Wiley & Sons, Ltd.

Overdetection and underdetection of depression and anxiety in primary care are common and may partly reflect individuals' misperceptions of the severity of symptoms they experience. Here, we explore how people's judgments about the severity of their own symptoms are influenced by their beliefs about the distribution of symptoms experienced by the rest of the population. We apply the rank-based decision by sampling cognitive model of judgment to symptom severity. The model proposes that judgments depend on the relative rank of an item within a mental sample of comparable items. It is predicted that judgments of symptom severity will be context dependent and more specifically that an individual's judgments will be invalid to the extent that the individual has inaccurate beliefs about the relevant social context. Two studies found that participants' assessments of symptom severity were rank based. Study 1 elicited participants' beliefs about the social distribution of symptoms and found that participants' judgments of whether they were depressed or anxious were mainly predicted not by their symptoms' objective severity but rather by where participants ranked the severity of their symptoms in comparison with the believed symptoms of others. Study 2 varied symptom distributions experimentally and again found relative rank effects as predicted. It is concluded that the real-world application of contextual models of judgment requires investigation of individual differences in participants' background beliefs. Copyright © 2012 John Wiley & Sons, Ltd.

In this article, we tested two concepts of decision making: expected utility theory and heuristic choice. In Experiment 1, we applied think-aloud protocols to investigate violations of expected utility theory. In Experiments 2 to 4, we introduced a new process-tracing method—called predict-aloud protocols—that has advantages over previously suggested research methods. Results show the following: (i) people examine information between rather than within gambles; (ii) the priority heuristic emerges as the most frequently used strategy when problems are difficult; and (iii) people check for similarity when problems are easy. Copyright © 2012 John Wiley & Sons, Ltd.

Research has demonstrated that individual differences in numeracy may have important consequences for decision making. In the present paper, we develop a shorter, psychometrically improved measure of numeracy—the ability to understand, manipulate, and use numerical information, including probabilities. Across two large independent samples that varied widely in age and educational level, participants completed 18 items from existing numeracy measures. In Study 1, we conducted a Rasch analysis on the item pool and created an eight-item numeracy scale that assesses a broader range of difficulty than previous scales. In Study 2, we replicated this eight-item scale in a separate Rasch analysis using data from an independent sample. We also found that the new Rasch-based numeracy scale, compared with previous measures, could predict decision-making preferences obtained in past studies, supporting its predictive validity. In Study, 3, we further established the predictive validity of the Rasch-based numeracy scale. Specifically, we examined the associations between numeracy and risk judgments, compared with previous scales. Overall, we found that the Rasch-based scale was a better linear predictor of risk judgments than prior measures. Moreover, this study is the first to present the psychometric properties of several popular numeracy measures across a diverse sample of ages and educational level. We discuss the usefulness and the advantages of the new scale, which we feel can be used in a wide range of subject populations, allowing for a more clear understanding of how numeracy is associated with decision processes. Copyright © 2012 John Wiley & Sons, Ltd.