The role of information search and its influence on risk preferences

According to the ‘Description–Experience gap’ (DE gap), when people are provided with the descriptions of risky prospects they make choices as if they overweight the probability of rare events; but when making decisions from experience after exploring the prospects’ properties, they behave as if they underweight such probability. This study revisits this discrepancy while focusing on information-search in decisions from experience. We report findings from a lab-experiment with three treatments: a standard version of decisions from description and two versions of decisions from experience: with and without a ‘history table’ recording previously sampled events. We find that people sample more from lotteries with rarer events. The history table proved influential; in its absence search is more responsive to cues such as a lottery’s variance while in its presence the cue that stands out is the table’s maximum capacity. Our analysis of risky choices captures a significant DE gap which is mitigated by the presence of the history table. We elicit probability weighting functions at the individual level and report that subjects overweight rare events in experience but less so than in description. Finally, we report a measure that allows us to compare the type of DE gap found in studies using choice patterns with that inferred through valuation and find that the phenomenon is similar but not identical across the two methods

The long and short of it: the temporal significance of wealth and income

In the literatures on the lived experience of poverty and richness temporal dimensions are underappreciated. Comparing qualitative interviews with those at opposite ends of the income and wealth distributions in the UK, we examine a temporal contrast: while “poor” participants experience money as flows of income which focus orientation to the present and constrain orientation to the future, “rich” participants experience money not only as flows of income, but also in the form of a stock of wealth which facilitates long-term orientations. Highlighting the enduring nature of wealth and the comparative short-termism of income, we argue that the way in which capital and income relates to individuals' orientations to the future is important for understanding how economic inequality is experienced. Put differently, the form which economic resources take matters for one's ability to plan and control the future. This insight contributes to our understanding of the experience of being economically advantaged or disadvantaged, with implications for (social) policy

How do risk attitudes affect measured confidence?

We examine the relationship between confidence in own absolute performance and risk attitudes using two confidence elicitation procedures: self-reported (non-incentivised) confidence and an incentivised procedure that elicits the certainty equivalent of a bet based on performance. The former procedure reproduces the “hard-easy effect” (underconfidence in easy tasks and overconfidence in hard tasks) found in a large number of studies using non-incentivised self-reports. The latter procedure produces general underconfidence, which is significantly reduced, but not eliminated when we filter out the effects of risk attitudes. Finally, we find that self-reported confidence correlates significantly with features of individual risk attitudes including parameters of individual probability weighting

Sex and the Single Cell. II. There Is a Time and Place for Sex

In both male and female Drosophila, only a subset of cells have the potential to sexually differentiate, making both males and females mosaics of sexually differentiated and sexually undifferentiated cells