How false feedback influences decision-makers’ risk preferences

Petko Kusev, Paul Van Schaik, Joseph Teal, Rose Martin, Lars Hall, Petter Johansson

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Abstract

Recent decision-making research provides empirical evidence that human risk
preferences are constructed ‘on the fly’ during risk elicitation, influenced by the
decision-making context and the method of risk elicitation (Kusev et al., 2020). In this
article we explore the lability of human risk preferences and argue that the most
recent choices guide decision-making. Accordingly, our novel proposal and
experimental method provide a psychological tool that measures people’s shift in
preferences. Specifically, in our experiment (240 participants, registered UK users of
an online survey panel) we developed and employed a two-stage risk elicitation
experimental method. The results from the experiment revealed that providing
participants with false feedback on their initial decisions (stage 1) changes their risk
preferences at the feedback stage of the experiment in the direction of the false
feedback. Moreover, participants’ final decisions (stage 2) were influenced by the
type of feedback (correct or false) and informed by their altered risk preferences at
the feedback stage of the experiment. In conclusion, our work provides experimental
evidence that human preferences are constructed ‘on the fly’, influenced by the
decision-making context and recent decision-making experience (e.g., Kusev et al.,
2020; Slovic, 1995).
Original languageEnglish
Number of pages9
JournalJournal of Behavioral Decision Making
DOIs
Publication statusPublished - 18 Feb 2022

Bibliographical note

Funding Information:
This article and the first author were supported in part by the Japan Society for the Promotion of Science (Tokyo) and the British Academy SG 47881. We also thank the researchers working in Kazuo Shigemasu's lab (University of Tokyo) and Kimihiko Yamagishi's lab (Tokyo Institute of Technology) for their comments and suggestions. Petter Johansson and Lars Hall wish to thank The Swedish Research Council (2014‐1371).

Publisher Copyright:
© 2022 The Authors. Journal of Behavioral Decision Making published by John Wiley & Sons Ltd.

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