<p>Prospect Theory models behaviour in one-off decisions where outcomes are described. Prospect Theory describes risk aversion when the choice is between gains and risk seeking when the choice is between losses. This asymmetry is known as the reflection effect. In choices about experienced outcomes, individuals show risk seeking for gains and risk aversion for losses. This change in the direction of gain-loss asymmetry is known as the description-experience gap. Across eight experiments, we examined gain-loss asymmetry in two experiential choice procedures. We compared the obtained results with predictions derived from Prospect Theory and the description-experience gap literature. In Study 1, we evaluated the predictions of the reversed reflection effect in probability discounting. Probability discounting is loss in reinforcer value as a function of uncertainty. In typical tasks measuring discounting, participants choose between smaller, certain amounts and a larger amount at one of several probabilities. In choice from description, most participants show a gain-loss asymmetry consistent with the predictions of the reflection effect, discounting gains more steeply than losses. Across three experiments, we examined whether gain-loss asymmetry also occurred when participants experienced the outcomes they chose, when they chose between two uncertain options, and when these two contexts were combined. Across all of the above contexts, no consistent mean difference in discounting of gains and losses was observed. Rather, in most of the tasks that provided experienced outcomes, the participants showed steeper discounting in the first condition completed, whether it involved choices about gains or losses. Furthermore, subsequent conditions produced shallower discounting, but notably, not shallower than choice based on the expected value of the options. In Studies 2 and 3, we followed-up on this order effect by providing the participants with experience of probabilistic outcomes before the discounting tasks. Participants discounted losses more steeply than gains, consistent with the predictions of a reversed reflection effect. In Study 2, we examined gain-loss asymmetry in a rapid-acquisition choice procedure using concurrent variable-interval schedules – the Auckland Card Task. Participants repeatedly chose between two decks of cards that varied in the frequency or magnitude of available gains or losses. Participants were more sensitive to changes in gain than loss frequency between the two decks, consistent with the predictions of a reversed reflection effect, while sensitivity to gain and loss magnitude did not show an asymmetry. We found a novel asymmetry in the local effects of gains and losses. In the frequency tasks, gains disrupted the general pattern of responding more than losses. In the magnitude tasks, varying the magnitude of losses had a bigger effect on local-level patterns following outcomes than varying the magnitude of gains. Across the two tasks we observed patterns of gain-loss asymmetry consistent with the predictions of a reversed reflection effect. We also observed several inconsistencies, particularly when comparing behaviour to choices that would maximize the expected returns. Our research suggested that sufficient exposure to chance outcomes and ensuring delivery of scheduled events are key challenges in further refinement of experiential choice in human operant tasks.</p>
The Reflection Effect for Higher Order Risk Preferences