Contagion Effect of Risk Preference under the Loss Frame and Its Potential Mechanism

2020 ◽  
Author(s):  
Deng Pan
Keyword(s):  
Risk Preference ◽  
Framing Effect ◽  
Risk Averse ◽  
Potential Mechanism ◽  
Contagion Effect ◽  
Choice Data ◽  
Human Risk ◽  
Risk Seeking ◽  
Learning From Others ◽  
Loss Frame

Our attitude toward risk plays a crucial role in influencing our everyday decision-making. Studies have found that human risk-preference are susceptible to the frame in which options are presented (“framing effect”) and can be altered by observing and learning from others’ risk-related decisions (“risk contagion effect”). In this study, we seek to found out the effect of contagion in risk preference under the context of loss, using choice data and computational modeling.We demonstrated that individual’s risk-preference can be readily shifted after observing other’s choices, and this contagion effect are considerably stronger after observing a risk-averse agent than a risk-seeking one under the Loss frame. We also found the distance in risk preference between observer and observee positively influenced the degree of risk contagion. Taken together, these findings provide a mechanistic account for how observing others’ risky choices can modulate an individual’s own risk-preference.

Responsibility, Guilt, and Decision under Risk

2003 ◽  
Vol 93 (3_suppl) ◽  
pp. 1077-1079 ◽  
Author(s):  
Francesco Mancini ◽  
Amelia Gangemi
Keyword(s):  
Risk Aversion ◽  
Decision Problem ◽  
Important Determinant ◽  
Framing Effect ◽  
Moral Values ◽  
Risk Averse ◽  
Decision Under Risk ◽  
Risk Seeking ◽  
Gain Loss

We hypothesize that individuals' choices (risk-seeking/risk-aversion) depend on moral values and, in particular, on how subjects evaluate themselves as guilty or as victims of a wrong rather than on the descriptions of the outcomes as given in the options and evaluated accordingly as gains or losses (framing effect). People who evaluate themselves as victims are expected to show a risk-seeking preference (context of innocence). People who evaluate themselves as guilty are expected to show a risk-averse preference (context of guilt). Responses of 232 participants to a decision problem were compared in four different conditions involving two-story formats (innocence/guilt) and two-question-options formats (gain/loss). Regardless of the format of the question options, the story format appears to be an important determinant of individuals' preferences.

scholarly journals The Role of Memory in Distinguishing Risky Decisions from Experience and Description

2017 ◽  
Vol 70 (10) ◽  
pp. 2048-2059 ◽  
Author(s):  
Christopher R. Madan ◽  
Elliot A. Ludvig ◽  
Marcia L. Spetch
Keyword(s):  
Risk Preferences ◽  
Risk Preference ◽  
Risky Choice ◽  
Risk Averse ◽  
Memory Biases ◽  
Opposite Pattern ◽  
Decisions From Experience ◽  
Risk Seeking ◽  
Subject Design

People's risk preferences differ for choices based on described probabilities versus those based on information learned through experience. For decisions from description, people are typically more risk averse for gains than for losses. In contrast, for decisions from experience, people are sometimes more risk seeking for gains than losses, especially for choices with the possibility of extreme outcomes (big wins or big losses), which are systematically overweighed in memory. Using a within-subject design, this study evaluated whether this memory bias plays a role in the differences in risky choice between description and experience. As in previous studies, people were more risk seeking for losses than for gains in description but showed the opposite pattern in experience. People also more readily remembered the extreme outcomes and judged them as having occurred more frequently. These memory biases correlated with risk preferences in decisions from experience but not in decisions from description. These results suggest that systematic memory biases may be responsible for some of the differences in risk preference across description and experience.

scholarly journals Behavioral contagion during learning about another agent’s risk-preferences acts on the neural representation of decision-risk

2016 ◽  
Vol 113 (14) ◽  
pp. 3755-3760 ◽  
Author(s):  
Shinsuke Suzuki ◽  
Emily L. S. Jensen ◽  
Peter Bossaerts ◽  
John P. O’Doherty
Keyword(s):  
Risky Behavior ◽  
Risk Preferences ◽  
Risk Preference ◽  
Brain Regions ◽  
Neural Representation ◽  
Functional Coupling ◽  
Human Risk ◽  
Dorsolateral Prefrontal ◽  
Neural Computations ◽  
Learning From Others

Our attitude toward risk plays a crucial role in influencing our everyday decision-making. Despite its importance, little is known about how human risk-preference can be modulated by observing risky behavior in other agents at either the behavioral or the neural level. Using fMRI combined with computational modeling of behavioral data, we show that human risk-preference can be systematically altered by the act of observing and learning from others’ risk-related decisions. The contagion is driven specifically by brain regions involved in the assessment of risk: the behavioral shift is implemented via a neural representation of risk in the caudate nucleus, whereas the representations of other decision-related variables such as expected value are not affected. Furthermore, we uncover neural computations underlying learning about others’ risk-preferences and describe how these signals interact with the neural representation of risk in the caudate. Updating of the belief about others’ preferences is associated with neural activity in the dorsolateral prefrontal cortex (dlPFC). Functional coupling between the dlPFC and the caudate correlates with the degree of susceptibility to the contagion effect, suggesting that a frontal–subcortical loop, the so-called dorsolateral prefrontal–striatal circuit, underlies the modulation of risk-preference. Taken together, these findings provide a mechanistic account for how observation of others’ risky behavior can modulate an individual’s own risk-preference.

Too Much to Lose: The Influence of Emotional Attachment on Risk Aversion

2020 ◽  
Author(s):  
Andy Lisheng Chan
Keyword(s):  
Risk Aversion ◽  
Loss Aversion ◽  
Risk Averse ◽  
Emotional Attachment ◽  
Risk Seeking ◽  
Seeking Behavior ◽  
The Stability ◽  
Loss Frame ◽  
Gain Frame ◽  
Mean Risk

Current literature suggests that the generalizability of the loss aversion hypothesis and in tandem risk aversion and framing effects may be less stable than previously specified. Hence, the current study seeks to investigate emotional attachment as a potential moderator of loss and subsequently risk aversion, helping inform both fields of economics and psychology in driving better policy and decision-making. 64 Temasek Polytechnic students, aged 16-23, were manipulated with either high or low emotional attachment towards an item and presented with an adapted Asian Disease Paradigm (Tversky & Kahneman, 1981) in either a gain or loss frame as a measure of the individual’s mean risk rating. ANOVA analysis revealed the stability of the loss aversion hypothesis identified in past literature – risk-averse behavior increased when a gain frame was presented, and risk-seeking behavior increased when a loss frame was presented. Critically, emotional attachment was found to moderate loss and risk aversion, validating past theoretical derivations (Ariely, Huber, & Wertenbroch, 2005; Novemsky & Kahneman, 2005): when emotional attachment was higher towards an item, participants displayed more risk-seeking behavior and more risk-averse behavior when in the context of losses and gains respectively, and displayed less risk-seeking and risk-averse behavior when they were less emotionally attached to an item in the same context of a gamble. Theoretical and practical implications of these findings are discussed in the context of nudging.

scholarly journals Macaques are risk-averse in a freely moving foraging task

2019 ◽  
Vol 9 (1) ◽  
Author(s):  
Benjamin R. Eisenreich* ◽  
Benjamin Y. Hayden ◽  
Jan Zimmermann
Keyword(s):  
Evolutionary History ◽  
Rhesus Macaques ◽  
Ecological Validity ◽  
Risk Preference ◽  
Task Design ◽  
Risk Attitudes ◽  
Risk Averse ◽  
Risk Seeking ◽  
Freely Moving ◽  
Foraging Task

Abstract Rhesus macaques (Macaca mulatta) appear to be robustly risk-seeking in computerized gambling tasks typically used for electrophysiology. This behavior distinguishes them from many other animals, which are risk-averse, albeit measured in more naturalistic contexts. We wondered whether macaques’ risk preferences reflect their evolutionary history or derive from the less naturalistic elements of task design associated with the demands of physiological recording. We assessed macaques’ risk attitudes in a task that is somewhat more naturalistic than many that have previously been used: subjects foraged at four feeding stations in a large enclosure. Patches (i.e., stations), provided either stochastically or non-stochastically depleting rewards. Subjects’ patch residence times were longer at safe than at risky stations, indicating a preference for safe options. This preference was not attributable to a win-stay-lose-shift heuristic and reversed as the environmental richness increased. These findings highlight the lability of risk attitudes in macaques and support the hypothesis that the ecological validity of a task can influence the expression of risk preference.

scholarly journals From Risk-Seeking to Risk-Averse: The Development of Economic Risk Preference from Childhood to Adulthood

2012 ◽  
Vol 3 ◽  
Author(s):  
David J. Paulsen ◽  
Michael L. Platt ◽  
Scott A. Huettel ◽  
Elizabeth M. Brannon
Keyword(s):  
Risk Preference ◽  
Risk Averse ◽  
Economic Risk ◽  
Risk Seeking

scholarly journals Risk aversion in macaques in a freely moving patch-leaving foraging task

2018 ◽  
Author(s):  
B. R Eisenreich ◽  
Benjamin Y. Hayden
Keyword(s):  
Evolutionary History ◽  
Risk Preference ◽  
Task Design ◽  
Risk Attitudes ◽  
Risk Averse ◽  
Risk Seeking ◽  
Major Exception ◽  
Naturalistic Environment ◽  
Freely Moving ◽  
Foraging Task

ABSTRACTAnimals, including humans, are risk-averse in most contexts. A major exception is the rhesus macaque (Macaca mulatta), which is robustly risk-seeking. Macaques‘ unique preferences may reflect their unique evolutionary history. Alternatively, they may derive from elements of task design associated with the demands of physiological recording, the source of nearly all macaque risk preference data. To disambiguate these possibilities we assessed macaques’ risk attitudes in a somewhat more naturalistic environment: subjects foraged at four feeding stations in a large enclosure. Stations (i.e. patches) provided either stochastically or non-stochastically depleting rewards. Subjects’ patch residence times were longer at safe than at risky stations, indicating a preference for safe options. This preference was not attributable to a win-stay-lose-shift heuristic. These findings highlight the lability of risk attitudes in macaques and support the hypothesis that observed differences between macaques and other species are ephemeral, not evolved.

scholarly journals P082 Gender moderates the effects of total sleep deprivation and sleep restriction on risk preference

2021 ◽  
Vol 2 (Supplement_1) ◽  
pp. A47-A48
Author(s):  
J Lim ◽  
J Boardman ◽  
S Drummond ◽  
D Dickinson
Keyword(s):  
Decision Making ◽  
Sleep Deprivation ◽  
Risk Preference ◽  
Sleep Restriction ◽  
Risk Averse ◽  
Risky Decision ◽  
Total Sleep Deprivation ◽  
Risk Levels ◽  
Risk Seeking ◽  
Time In Bed

Abstract Introduction Total sleep deprivation (TSD) affects risk preference in decision-making. However, little work has examined the effects of sleep restriction (SR), or the potentially moderating role of gender, on risk preference. Here, we investigate the effects of TSD, SR, and gender on risky decision-making. Methods 47 healthy adults (age=24.57±5.26 years, 24F) were randomly assigned to either of 2 counterbalanced protocols: 1) well-rested (WR: 9-hours time-in-bed for 6 nights) and 30hours TSD; or 2) WR and SR (4-hours time-in-bed for 4 nights). Participants performed the Lottery Choice Task (LCT) on the last day of each week. LCT requires a series of choices between two risky gambles with different risk levels. In one block, participants sought to maximise monetary gain (GAINS), and in another block, they sought to minimise losses (LOSSES). A trial-level analysis evaluated participants’ likelihood of choosing the “safer” gamble under influence of each sleep condition. Results The version*condition*gender interaction was significant. GAINS: everyone became more risk averse during TSD. Females also became more risk averse during SR, but males did not. LOSSES: everyone became more risk seeking during SR. During TSD, females became relatively more risk averse, while males became relatively more risk seeking. Conclusion TSD and SR had similar impacts on risk preference. However, gender moderated some effects. Women generally became more risk averse during sleep loss for both GAINS and LOSSES. Men were more risk averse for GAINS and risk seeking for LOSSES. This has implications for real-world situations where individuals are required to make risky decisions.

scholarly journals Unrealistic optimism and decision making

Psihologija ◽  
2009 ◽  
Vol 42 (4) ◽  
pp. 567-584
Author(s):  
Bojana Bozovic ◽  
Vasilije Gvozdenovic
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Framing Effect ◽  
Risk Averse ◽  
Subjective Probabilities ◽  
Unrealistic Optimism ◽  
Decision Making Under Risk ◽  
Risk Seeking ◽  
Individual Decisions ◽  
Descriptive Theories

One of the leading descriptive theories of decision-making under risk, Tversky & Kahneman's Prospect theory, reveals that normative explanation of decisionmaking, based only on principle of maximizing outcomes expected utility, is unsustainable. It also underlines the effect of alternative factors on decision-making. Framing effect relates to an influence that verbal formulation of outcomes has on choosing between certain and risky outcomes; in negative frame people tend to be risk seeking, whereas in positive frame people express risk averse tendencies. Individual decisions are not based on objective probabilities of outcomes, but on subjective probabilities that depend on outcome desirability. Unrealistically pessimistic subjects assign lower probabilities (than the group average) to the desired outcomes, while unrealistically optimistic subjects assign higher probabilities (than the group average) to the desired outcomes. Experiment was conducted in order to test the presumption that there's a relation between unrealistic optimism and decision-making under risk. We expected optimists to be risk seeking, and pessimist to be risk averse. We also expected such cognitive tendencies, if they should become manifest, to be framing effect resistant. Unrealistic optimism scale was applied, followed by the questionnaire composed of tasks of decision-making under risk. Results within the whole sample, and results of afterwards extracted groups of pessimists and optimists both revealed dominant risk seeking tendency that is resistant to the influence of subjective probabilities as well as to the influence of frame in which the outcome is presented.

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