Super‐Underweighting of Rare Events with Repeated Descriptive Summaries

Datos Bibliográficos

ID12166345
AutoresEldad Yechiam (0000-0003-0389-2131, Technion – Israeli Institute of Technology Israel, autor de correspondencia), Tim Rakow (0000-0002-7127-8793, University of Essex UK), Ben R Newell (0000-0003-1898-205X, University of New South Wales Australia)
Año2014
Volumen28
Número1
Páginas67-75
Fecha de publicación2014-08-07
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaJournal of Behavioral Decision Making (JOURNAL)
Identificadores de la revistaISSN: 0894-3257 • E-ISSN: 1099-0771
EditorialWiley (PUBLISHER • GB)
DOI10.1002/bdm.1829
OpenAlexW1608435608
IdiomaEN
Citas recibidas3
Referencias citadas33

Field studies suggest that providing summarized information concerning the prevalence of risks can increase risk taking when the hazard is rare. We study a simple experimental model of this phenomenon based on repeated descriptive summaries of past outcomes. Under cumulative prospect theory and experience‐sampling models, descriptions of rare events should increase the weighting of rare events. On the other hand, if individuals are sensitive to the frequency of events, then event summaries are expected to accentuate the underweighting of rare events despite adding descriptive information. These contrasting predictions were examined in three experiments using a multi‐alternative decision task with two sets of options: safe and risky. In all three experiments, repeated descriptive summaries of past outcomes from all alternatives or from a randomly drawn alternative were found to accentuate the underweighting of rare events by a similar amount. The results shed light on the role of frequency‐based judgments in the extreme underweighting of rare events and highlight that providing information about the incidence of rare hazards can have the unintended effect of increasing, rather than decreasing, people's propensity to take risks. Copyright © 2014 John Wiley & Sons, Ltd

Actuarial science · Cognitive psychology · Descriptive research · Descriptive statistics · Econometrics · Economics · Event (particle physics · Hazard · Rare events · Statistics · Weighting · Computer Science · Decision-Making and Behavioral Economics · Forecasting Techniques and Applications · Mathematics · Medicine · Psychology · Risk Perception and Management