The rational side of decision bias based on verbal probabilities

Abstract

Verbal probabilistic expressions (verbal probabilities) contain a communicative function called directionality and can becategorized as positive (e.g., likely or probable) or negative (e.g., unlikely or doubtful) on the ba-sis of their directionality.Previous studies have demonstrated that the directionality of phrases affects decisions. In particular, people tend to be morerisk seeking when presented with positive phrases and risk averse when presented with negative phrases. The rationality(i.e., maximizing utility) of such seemingly biased decisions is examined in this study. We hypothesize that because aspeaker tends to choose a positive or negative expression on the basis of context, the selected phrase works as an adaptivecue for understanding the situational change, and that decision biases based on differences in expressions will lead tomore rational decision making. Computer simulations were conducted regarding decisions with uncertainty based onverbal probabilities. We found that despite speaker biases in probability judgments, miscommunication generated by thevagueness of verbal expressions, and individual differences in subjective values, biased deci-sion makers who changedtheir risk attitude on the basis of the directionality of verbal probabilities could make more decisions that were rationalthan could those who did not show such decision biases

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