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

By Christoph Ungemach, Neil Stewart and Stian Reimers

Abstract

How different are £0.50 and £1.50, or "a small chance" and "a good chance", or "three months" and "nine months"? Our experiments show that people behave as if these differences alter after incidental everyday experiences. Preference for a £1.50 lottery rather than a £0.50 lottery was stronger after exposure to intermediate supermarket prices. Preference for "a good chance" of winning rather than "a small chance" was stronger after predicting intermediate probabilities of rain. Preference for consumption in "three month" rather than "nine months" was stronger after planning for an intermediate birthday. These fluctuations offer a direct challenge to economic accounts which translate monies, risks, and delays into subjective equivalents by stable functions. The decision by sampling model, in which subjective values are rank positions constructed from comparisons with samples of monies, probabilities, or delays, predicts these effects and indicates a primary role for sampling in decision making

Topics: BF, HB
Publisher: Sage
Year: 2011
OAI identifier: oai:wrap.warwick.ac.uk:4470

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