scholarly journals People Behave as if they Anticipate Regret Conditional on Experiencing a Bad Outcome

2021 ◽  
Author(s):  
William Ryan ◽  
Stephen Baum ◽  
Ellen Riemke Katrien Evers
Keyword(s):  
Decision Making ◽  
Decision Makers ◽  
Relative Reduction ◽  
Risk Averse ◽  
Regret Theory ◽  
Risky Decision ◽  
Scarce Resources ◽  
Reduce Risk ◽  
Anticipate Regret ◽  
As If

Decision-makers often must decide whether to invest in prospects to reduce risk or instead save scarce resources. Existing models of risky decision making assume that decision-makers consider the absolute improvement in probabilistic chances (e.g., increasing a 10% chance of winning $10 to a 20% chance is roughly similar to increasing an 80% chance of winning $10 to a 90% chance). We present evidence that people instead behave as if they consider the relative reduction in bad outcomes (increasing a 10% chance to a 20% chance eliminates 1/9th of all bad outcomes, while increasing an 80% chance to a 90% chance eliminates 1/2 of all bad outcomes). This bias in the anticipation of preventable bad outcomes drives risk preferences that violate normative standards and results in the same participants behaving both risk-seeking and risk-averse within the same decision-making task. We discuss how regret theory can be adjusted to accommodate these results.

scholarly journals Risky Multi-Attribute Decision-Making Method Based on the Interval Number of Normal Distribution

Symmetry ◽  
2020 ◽  
Vol 12 (2) ◽  
pp. 264
Author(s):  
Sha Fu ◽  
Xi-Long Qu ◽  
Ye-Zhi Xiao ◽  
Hang-Jun Zhou ◽  
Guo-Bing Fan
Keyword(s):  
Decision Making ◽  
Normal Distribution ◽  
Interval Number ◽  
Information Environment ◽  
Decision Makers ◽  
Standard Normal Distribution ◽  
Risky Decision ◽  
Possibility Degree ◽  
Standard Normal ◽  
Multi Attribute Decision Making

Focusing on risky decision-making problems taking the interval number of normal distribution as the information environment, this paper proposes a decision-making method based on the interval number of normal distribution. Firstly, the normalized matrix based on the decision maker’s attitude is obtained through analysis and calculation. Secondly, according to the existing properties of standard normal distribution, the risk preference factors of the decision makers are considered to confirm the possibility degree of each scheme. The possibility degree is then used for establishing a possibility degree matrix and, consequently, sequencing of all schemes is conducted according to existing theories of possibility degree meaning and the value size of possibility degree. Finally, the feasibility and validity of this method is verified through calculation example analysis.

Self–Other Differences in Decision-Making Under Risk

2018 ◽  
Vol 65 (4) ◽  
pp. 226-235 ◽  
Author(s):  
Jingyi Lu ◽  
Xuesong Shang ◽  
Bingjie Li
Keyword(s):  
Decision Making ◽  
Decision Makers ◽  
Risk Averse ◽  
Emotional States ◽  
Decision Making Under Risk ◽  
Behavioral Consequences ◽  
Decisions Under Risk ◽  
Decisions For Others ◽  
Interpersonal Concerns ◽  
Risky Decisions

Abstract. Decisions made for others reflect not only decision-makers’ cognitive and emotional states but also decision-makers’ interpersonal concerns. People who make choices for others will potentially be blamed for unappealing outcomes by others. Therefore, we hypothesize that individuals will seek sure gains (which increase individuals’ responsibility for desirable outcomes) and avoid sure losses (which decrease individuals’ responsibility for undesirable outcomes) when making risky decisions for others more than when making such decisions for themselves. The results of two studies show that making decisions for others (vs. oneself) promotes risk-averse choices over gains. This effect may be driven by the perceived responsibility associated with different options. When both options exhibit variance in outcomes, such self–other difference disappears. However, no self–other difference over losses was observed. Taken together, our research highlights interpersonal concerns in making decisions for others, as well as the behavioral consequences of these concerns in decisions under risk.

Choosing for another: Social context changes dissociable computational mechanisms of risky decision-making

2020 ◽  
Author(s):  
Dominic S. Fareri ◽  
Joanne Stasiak ◽  
Peter Sokol-Hessner
Keyword(s):  
Decision Making ◽  
Social World ◽  
Close Friend ◽  
Risk Averse ◽  
Risky Decision Making ◽  
Same Sex ◽  
Risky Decision ◽  
Economic Decisions ◽  
Hierarchical Bayesian Estimation ◽  
The Social

Choices under conditions of risk often have consequences not just for ourselves, but for others. Yet, it is unclear how the other’s identity (stranger, close friend, etc.) influences risky choices made on their behalf. Here, two groups of undergraduates made a series of risky economic decisions for themselves, for another person, or for both themselves and another person (i.e., shared outcomes); one group of participants made choices involving a same-sex stranger (n = 29), the other made choices involving a same-sex close friend (n = 28). Hierarchical Bayesian Estimation of computations underlying risky decision-making revealed that relative to choosing for themselves, people were more risk averse, more loss averse, and more consistent when choices involved another person. Interestingly, partner identity differentially modulated decision computations. People became risk neutral and more consistent when choosing for friends relative to strangers. In sum, these findings suggest that the complexity of the social world is mirrored in its nuanced consequences for our choices.

Comparison of Risk Aversity for Two Utility Functions on ℝ2

2019 ◽  
Vol 23 (3) ◽  
pp. 555-560
Author(s):  
Yuji Yoshida ◽  
Keyword(s):  
Decision Making ◽  
Sufficient Conditions ◽  
Utility Functions ◽  
Decision Makers ◽  
The Other ◽  
Necessary Condition ◽  
Risk Averse ◽  
Two Dimensional ◽  
Arithmetic Means

Utility functions on two-dimensional regions are demonstrated for decision makers’ risk averse behavior by weighted quasi-arithmetic means. For two utility functions on two-dimensional regions, a concept is introduced that decision making with one utility is more risk averse than decision making with the other utility. A necessary condition and sufficient conditions for the concept are demonstrated by their utility functions.

Determinants of Risk Taking in a Dynamic Uncertain Context

2002 ◽  
Vol 28 (1) ◽  
pp. 89-106 ◽  
Author(s):  
Jeffrey P. Slattery ◽  
Daniel C. Ganster
Keyword(s):  
Decision Making ◽  
Risk Taking ◽  
Goal Attainment ◽  
Decision Makers ◽  
Complex Dynamic ◽  
Managerial Decision ◽  
Risky Decision ◽  
Dynamic Task ◽  
Outcome Feedback ◽  
Uncertain Outcomes

We tested the effects of positive and negative framing on risky decision making in a simulated managerial judgement task. Until now the extensive research on framing effects has been characterized by static contexts, explicit probabilities, and hypothetical gambles. In contrast we simulated a more realistic decision making environment in which individuals chose more or less risky goals in a complex dynamic task that featured uncertain outcomes and meaningful consequences. Decision makers chose a series of performance goals under conditions of either potential losses or gains and also received feedback about their goal attainment. Our results failed to replicateProspect Theory predictions about initial gain vs.loss framing typically found in static decision making contexts. In addition, we tested competing hypotheses derived from Prospect Theory and Quasi-Hedonic Editing (QHE) Theory about the effects of performance outcome feedback on subsequent decisions. Consistent with QHE Theory, decision makers who had failed to reach their goals set lower, less risky goals in subsequent decisions. Our findings illustrate the need for further risk taking research in environments that more closely resemble managerial decision making.

Developing Effective Flight Crew Decision Makers

1994 ◽  
Vol 38 (14) ◽  
pp. 931-934
Author(s):  
Elizabeth A. Lyall
Keyword(s):  
Decision Making ◽  
Training Programs ◽  
Decision Makers ◽  
Flight Training ◽  
Complex Environment ◽  
Flight Crew ◽  
Effective Training ◽  
Operations Performance ◽  
As If

The need for including decision making training objectives in the development of flight crew training programs is evident given the dynamic and complex environment in which the pilots perform. The experience of one airline in developing training for their flight crews has demonstrated that these types of objectives can be effectively integrated into their line oriented flight training (LOFT) program. The primary goal of LOFT is to create a realistic environment in which the pilots perform as if they are in line operations. Performance in this environment sets the stage for an effective training debriefing. An essential part of creating this environment is allowing for realistic decisions to be made that are followed by the appropriate outcomes and consequences. Pilots have consistently rated these training events as effective and helpful. Besides these student critiques, the effectiveness of the training is also evaluated using check pilot observations of crew performance in line operations.

Mixed Frames and Risky Decision-Making

2017 ◽  
Vol 120 (6) ◽  
pp. 1037-1057 ◽  
Author(s):  
Jiaxi Peng ◽  
Jiaxi Zhang ◽  
Hao Sun ◽  
Zhicong Zeng ◽  
Yuexia Mai ◽  
...  
Keyword(s):  
Decision Making ◽  
Reference Point ◽  
Framing Effect ◽  
Presentation Order ◽  
Decision Makers ◽  
Risky Decision Making ◽  
Hedonic Tone ◽  
Risky Decision ◽  
Risky Option

By applying unitive vocabulary, “die” or “save,” to respective frames of the Asian disease problem, Tversky and Kahneman were able to define framing effect. In this study, we preliminarily explored the effect of mixed frames, which are characterized by the use of different vocabulary in one frame. In study 1, we found that only the sure option description had significant effect on decision-making, while the effects of risky option descriptions were not significant, nor were interactions between descriptions. In study 2, the results suggested that after controlling the effects of the hedonic tone of the sure options, risky option description did not significantly predict decision-making. In study 3, we found that neither the sure-to-risky option presentation order nor presentation order within risky options had significant effect on decision-making. We thus concluded that sure option description can serve as the decision-making foundation (reference point) for decision-makers in mixed frames.

An Improved MABAC Group Decision-Making Method Using Regret Theory and Likelihood in Probability Multi-Valued Neutrosophic Sets

2020 ◽  
Vol 19 (05) ◽  
pp. 1353-1387
Author(s):  
Peide Liu ◽  
Shufeng Cheng
Keyword(s):  
Decision Making ◽  
Group Decision Making ◽  
Group Decision ◽  
Decision Makers ◽  
Neutrosophic Set ◽  
Regret Theory ◽  
Neutrosophic Sets ◽  
Three Phase ◽  
Distance Deviation

Probability multi-valued neutrosophic set (PMVNS) is a preferable tool to capture the preference and hesitancy of decision makers (DMs) and to depict inconsistent and ambiguous information. In this paper, we improve the multi-attributive border approximation area comparison (MABAC) method under the PMVNS environment and establish a three-phase multi-attribute group decision-making (MAGDM) method. Firstly, some concepts of PMVNS, traditional MABAC method and regret theory (RT) are reviewed. Then, the similarity measure for PMVNSs is defined and utilized to derive the important degree of DMs, and the likelihood of preference relations expressed by the probability multi-valued neutrosophic numbers (PMVNNs) is first presented and employed to replace the distance deviation in traditional MABAC method. Furthermore, a novel MAGDM method where the performance of alternatives is expressed by the PMVNN is established by combining the likelihood-based MABAC method and RT which considered given DMs’ behavior psychology. Finally, a case study is implemented to demonstrate the feasibility and applicability of our proposed approach.

A novel method for multi-attribute risk decision-making based on regret theory and hybird information

2020 ◽  
Vol 39 (5) ◽  
pp. 6955-6964
Author(s):  
Nian Zhang ◽  
Yunpeng Han ◽  
Quanshen Si ◽  
Guiwu Wei
Keyword(s):  
Decision Making ◽  
Transformation Method ◽  
Decision Makers ◽  
Regret Theory ◽  
Utility Values ◽  
Weighted Arithmetic ◽  
Relative Closeness ◽  
Decision Making Problem ◽  
Ranking Order ◽  
Risk Decision

To consider the decision makers’ regret behavior and describe the hybrid evolution information in the risk decision-making problem, a new approach is proposed based on regret theory in this paper. Firstly, the probable value of different states are calculated by Pignistic probability transformation method. Secondly, the relative closeness formula of hybrid information are established and the utility values of alternatives are computed. Then, decision makers’ utility values are obtained according to the regret theory. Moreover, the overall perceived utility values of alternatives are obtained by weighted arithmetic mean and got the optimal one by the ranking order. Finally, an numerical example is illustrated the method and comparative analysis are offered between the proposed approach and other existed methods to show that is feasible and usable.

Sign in / Sign up

Export Citation Format

Share Document