Influence of negative affect on the shape of the probability weighting function
DOI:
https://doi.org/10.14659/PJOEP.2014.05.01Keywords:
risk perception, probability weighting function, affect, numeracyAbstract
When making decisions, people tend tooverweight small probabilities and underweight moderate and high probabilities. This bias is stronger for affect-rich outcomes. In the current research, we investigated the influence of object-irrelevant affect on distortions of probabilities. Subjects participated in two independent tasks. In the first one, participants had tofollow sets of stimuli displayed serially on ascreen. Depending on the experimental condition, neutral envelopes were presented with aset of other neutral or negative stimuli. In the second task, subjects declared certainty equivalents for nine lotteries by giving the maximum amount of money that they would pay in order toinsure negatively or neutrally conditioned envelopes from previous task. We estimated the probability weighting function described by two parameters – attractiveness of the lottery outcome and probability discriminability – for both experimental conditions, separately. Participants showed alower mean value of attractiveness for negatively conditioned envelopes. However, the discriminability parameter did not differ between conditions. Additionally, we found that less numerate individuals use object-irrelevant affect tomake decisions under risk, which is expressed in more pronounced distortions in probability weighting.
References
Baty, F., Delignette-Muller, M. L. (2013). nlstools: tools for nonlinear regression diagnostics.
Cokely, E.T., Galesic, M., Schulz, E., Ghazal, S., Garcia-Retamero, R. (2012). Measuring risk literacy: The Berlin Numeracy Test. Judgment and Decision Making, 7, 25-47.
De Houwer, J., Thomson, S., Baeyens, F. (2001). Associative Learning of Likes and Dislikes: a Review of 25 Years of Research on Human Evaluative Conditioning. Psychological Bulletin, 127(6), 853-869.
Gonzalez, R., Wu, G. (1999). On the Shape of the Probability Weighting Function. Cognitive Psychology, 38, 129–166.
Hayes, A. F. (2013). Introduction to Mediation, Moderation, and Conditional Process Analysis. A Regression-Based Approach. New York: Guilford Press.
Hsee, C.K., Kunreuther, H. C. (2000). The Affection Effect in Insurance Decisions. Journal of Risk and Uncertainty, 20(2), 141-159.
Jones, R. C., Fazio, R. H., Olson, M. A. (2010). Implicit Misattribution as a Mechanism Underlying Evaluative Conditioning. Journal of Personality and Social Psychology, 96(5), 933-948.
Kahneman, D., Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263-292.
Lang, P. J., Bradley, M. M., Cuthbert, B. N. (2008). International Affective Picture System (IAPS): Affective ratings of pictures and instruction manual. Technical Report A-8. University of Florida, Gainesville, FL.
Loewenstein, G. F., Weber, E. U., Hsee, C. K., Welch, N. (2001). Risk as Feeling. Psychological Bulletin, 127(2), 267-286.
Olson, M. A., Fazio, R. H., (2001). Implicit Attitude Formation Through Classical Conditioning. Psychological Science, 12(5), 413-417.
Peters, E. (2012). Beyond Comprehension: The Role of Numeracy in Judgments and Decisions. Current Directions in Psychological Science, 21, 31-35.
Peters, E., Västfjäll, D., Slovic, P., Mertz, C. K., Mazzocco, K., Dickert S. (2006). Numeracy and decision making. Psychological Science, 17, 407-413.
Petrova, D. G., van der Pligt, J., Garcia-Retamero, R. (2013). Feeling the Numbers: On the Interplay Between Risk, Affect, and Numeracy. Journal of Behavioral Decision Making, 27(3), 191-199.
R Core Team (2013). R: A language and environment for statistical computing. R Foundation for Statistical Computing, Vienna, Austria.
Rottenstreich, Y., Hsee, C. K. (2001). Money, Kisses and Electric Shocks: On the Affective Psychology of Risk. Psychological Science, 12(3), 185-190.
Tversky, A., Kahneman, D. (1992). Advances in Prospect Theory: Cumulative Representation of Uncertainty. Journal of Risk and Uncertainty, 5(4), 297–323.
Downloads
Published
Issue
Section
License
Authorship
The Author (Co-authors) declares that the submitted paper does not infringe on the third parties’ copyright, consents to submitting the paper to the reviewing procedure and introducing editorial changes in it, and conveys proprietary copyright to the paper free of charge to publisher for uses stipulated in paragraph 50 of the Polish Bill on Copyright and Related Rights of 4.02.1994, provided that the paper has been accepted for publication and published.
Conditions of use
The Publisher owns the proprietary copyright to all materials published in the journal. Articles are made available on the basis of non-exclusive Creative Commons Attribution-NonCommercial-ShareAlike 3.0 licence. The full text of the licence can be found at http://creativecommons.org/licenses/by-nc-sa/3.0/legalcode, and its accessible summary a thttp://creativecommons.org/licenses/by-nc-sa/3.0/deed.en.
Posting the text in the repository, on the author’s homepage or other website is permitted on condition that it does not entail gaining material benefits and the text is equipped with full source documentation (including the title, volume, issue and internet address of the journal).
All those interested in using the materials published in the journal for commercial purposes are kindly requested to contact the Editors.
