Prospect Theory Reflects Selective Allocation of Attention

There is a disconnect in the literature between analyses of risky choice based on cumulativeprospect theory (CPT) and work on predecisional information processing. One likely reason is that for expectation models (e.g., CPT) it is often assumed that people only behaved as if they conducted the computations leading to the predicted choice, and that the models are thus mute with regard to information processing. We suggest that key psychological constructs in CPT, such as loss aversion and outcome and probability sensitivity, can be interpreted in terms of attention allocation. In two experiments, we tested hypotheses about specific links between CPT parameters and attentional regularities. Experiment 1 used process tracing to monitor participants’ predecisional attention allocation to outcome and probability information. As hypothesized, individual differences in CPT’s loss-aversion, outcome-sensitivity, and probability-sensitivity parameters (estimated from participants’ choices) were systematically associated with individual differences in attention allocation to outcome and probability information. For instance, loss aversion was associated with the relative attention allocated to loss and gain outcomes, and a more strongly curved weighting function was associated with less attention allocated to probabilities. Experiment 2 manipulated participants’ attention to losses or gains, causing systematic differences in CPT’s loss aversion parameter. This result indicates that attention allocation can to some extent cause choice regularities that are captured by CPT. Our findings demonstrate an “as-if” model’s capacity to reflect characteristics of information processing. We suggest that the observed CPT–attention links can be harnessed to inform the development of process models of risky choice.