Probability matching in risky choice: The interplay of feedback and strategy availability
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Probability matching in risky choice: The interplay of feedback and strategy availability Ben R. Newell & Derek J. Koehler & Greta James & Tim Rakow & Don van Ravenzwaaij
Published online: 8 November 2012 # Psychonomic Society, Inc. 2012
Abstract Probability matching in sequential decision making is a striking violation of rational choice that has been observed in hundreds of experiments. Recent studies have demonstrated that matching persists even in described tasks in which all the information required for identifying a superior alternative strategy—maximizing—is present before the first choice is made. These studies have also indicated that maximizing increases when (1)the asymmetry in the availability of matching and maximizing strategies is reduced and (2)normatively irrelevant outcome feedback is provided. In the two experiments reported here, we examined the joint influences of these factors, revealing that strategy availability and outcome feedback operate on different time courses. Both behavioral and modeling results showed that while availability of the maximizing strategy increases the choice of maximizing early during the task, feedback appears to act more slowly to erode misconceptions about the task and to reinforce optimal responding. The results illuminate the interplay between “topdown” identification of choice strategies and “bottom-up” discovery of those strategies via feedback.
does the other, a rational agent should always choose the option with the higher payoff probability. For example, if one option delivers one dollar 70 % of the time (and nothing the rest of the time), while the other pays one dollar only 30 % of the time (and otherwise nothing), a rational agent should choose the 70 % option. This is true whether the choice is faced once or repeatedly: The option offering the higher probability of receiving the payoff should always be chosen. Despite the clear superiority of this strategy (referred to as maximizing), participants faced with a series of such choices often show responding closer to probability matching—allocating responses to the two options in proportion to their relative probabilities of occurrence. In other words, people bet on the 30 % option 30 % of the time, and the 70 % option 70 % of the time (James & Koehler, 2011). This striking violation of rational choice has been studied extensively over the last 60 years (Vulkan, 2000). Most probability-matching experiments have used paradigms in which participants had to learn, over successive trials, the contingencies associated with each option (e.g., Shanks, Tunney, & McCarthy, 2002).1 However, some recent studies
Keywords Probability matching . Maximizing . Decision making . Heuristics . Rational choice theory When faced with a choice between two options, one of which offers a higher probability of receiving a fixed payoff than B. R. Newell (*) : D. van Ravenzwaaij School of Psychology, University of New South Wales, Sydney 2052, Australia e-mail: [email protected] D. J. Koehler : G. James Department of Psychology
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