Explaining heterogeneity in utility functions by individual differences in preferred decision modes

Daniel Schunk and Cornelia Betsch

No 04-26, Papers from Sonderforschungsbreich 504

Abstract: The curvature of utility functions varies between people. We suggest that there exists a relationship between the mode in which a person usually makes a decision and the curvature of the individual utility function. In a deliberate decision mode, a decision-maker tends to have a nearly linear utility function. In an intuitive decision mode, the utility function is more curved. In our experiment the utility function is assessed with a lottery-based utility elicitation method and related to a measure that assesses the habitual preference for intuition and deliberation (Betsch, submitted). Results confirm that for people that habitually use the deliberate decision mode, the utility function is more linear than for people that habitually use the intuitive decision mode. The finding and its implications for the research on individual decision behavior in economics and psychology are discussed.

Keywords: Utility function elicitation; risky decisions; intuition; value function; individual differences (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (5)

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Working Paper: Explaining heterogeneity in utility functions by individual differences in preferred decision modes (2004)
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