The impact of experience on decisions based on pre-choice samples and the face-or-cue hypothesis
Ido Erev (),
Nathaniel J. S. Ashby and
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Ido Erev: Technion
Ofir Yakobi: University of Waterloo
Nathaniel J. S. Ashby: Harrisburg University of Science and Technology
Nick Chater: University of Warwick
Theory and Decision, 2022, vol. 92, issue 3, No 8, 583-598
Abstract The growing literature on how people learn to make decisions based on experience focuses on two types of paradigms. In one paradigm, people are faced with a choice, and must retrospectively consult past experience of similar choices to decide what to do. In the other paradigm, people are faced with a choice, and then have the opportunity prospectively to gather new experiences that might help them make that choice. The current paper examines the joint impact of both retrospective and prospective experiences. Two experiments reveal strong interactions. In Study 1, repeated experience with new samples appears to reduce sensitivity to the average outcome in the samples and enhances underweighting of rare events. Study 2 shows that repeated experience with pre-choice samples can reverse the impact of the new information (and decrease the tendency to select the alternative that provides the best outcome in the new sample). The results suggest that prospectively gathering new samples can have two, potentially contrasting, influences on choice: the first focuses on the sample’s face value and selects the option with the higher value in the new sample; by contrast, the second treats the new sample as a cue to recall similar prior experiences, which in turn drive choice. The paper concludes with a discussion of the possibility that part of the descriptive value of prospect theory reflects the fact that it summarizes the joint impact of similar “face-or-cue” processes.
Keywords: Decisions from experience; Sampling paradigm; Clicking paradigm; Choice variability; Learning (search for similar items in EconPapers)
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