Decisions from experience and statistical probabilities
Why they trigger different choices than a priori probabilities
Bibliographic Data
| ID | 12166239 |
|---|---|
| Authors | Robin Hau (University of Basel, corresponding author), Timothy J Pleskac (0000-0001-5761-1900, Michigan State University), Ralph Hertwig (0000-0002-9908-9556, University of Basel) |
| Year | 2009 |
| Volume | 23 |
| Issue | 1 |
| Pages | 48-68 |
| Publication date | 2009-10-08 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Behavioral Decision Making (JOURNAL) |
| Journal identifiers | ISSN: 0894-3257 • E-ISSN: 1099-0771 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/bdm.665 |
| OpenAlex | W2152425901 |
| Language | EN |
| Citations received | 24 |
| References cited | 56 |
The distinction between risk and uncertainty is deeply entrenched in psychologists' and economists' thinking. Knight ( 1921 ), to whom it is frequently attributed, however, went beyond this dichotomy. Within the domain of risk, he set apart a priori and statistical probabilities, a distinction that maps onto that between decisions from description and experience, respectively. We argue this distinction is important because risky choices based on a priori (described) and statistical (experienced) probabilities can substantially diverge. To understand why, we examine various possible contributing factors to the description–experience gap. We find that payoff variability and memory limitations play only a small role in the emergence of the gap. In contrast, the presence of rare events and their representation as either natural frequencies in decisions from experience or single‐event probabilities in decisions from description appear relevant for the gap. Copyright © 2009 John Wiley & Sons, Ltd
A priori and a posteriori · Cognitive psychology · Econometrics · Economics · Epistemology · Event (particle physics · Mathematical economics · Political science · Rare events · Representation (politics · Set (abstract data type · Statistics · Stochastic game · Computer Science · Decision-Making and Behavioral Economics · Forecasting Techniques and Applications · Mathematics · Philosophy · Philosophy and History of Science · Psychology
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Underweighting rare events in experience based decisions
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Decisions from Experience and the Effect of Rare Events in Risky Choice
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Advances in prospect theory
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The magical number seven, plus or minus two
Range of Payoffs and Feedback in Risk Taking
Range of Payoffs and Feedback in Risk Taking
Small feedback‐based decisions and their limited correspondence to description‐based decisions
The ‘conjunction fallacy’ revisited
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| Unique citing works | 24 |
|---|---|
| Citations per year | 1,41 |
| Citation span | 2009 - 2024 (16) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 23 |