Consistency in probability processing as a function of affective context and numeracy

Jakub Traczyk , Kamil Fuławka , Dominik Lenda , Tomasz Zaleśkiewicz

Abstract

Processing information about probabilities is an integral part of decision making under risk. Even when objective probabilities are explicitly provided, people tend to distort them, which is reflected by an inverted S‐shaped probability weighting function. Such distortions depend on different factors such as numeracy and affect. The present study contributes to the understanding of how people use probabilities in risky decision making by introducing the concept of consistency in probability processing―a measure of how coherent people are in using objective probabilities. We hypothesized that consistency would depend on factors similar to those that influence the shape of the probability weighting function. Moreover, we predicted that probability processing consistency would be related to better decision outcomes in an experimental betting task. In three experiments, participants were presented with the probability of a potential gain/loss and had to place a bet on a given chance to maximize their total earnings. We defined probability processing consistency as the variance of bets placed on the same probability value, with higher variance indicating lower consistency. We found that consistency in probability processing was lower in relatively affect‐rich conditions and greater for people with higher numeracy. Additionally, people who exhibited more consistent processing of probabilities gained higher earnings from the experimental task irrespective of whether their betting strategy was optimal and of their risk preference. Our findings imply that consistency in processing probabilities may be an important factor in understanding betting strategies and the quality of decisions.
Author Jakub Traczyk (Filia we Wrocławiu / Wydział Psychologii we Wrocławiu)
Jakub Traczyk,,
- Wydział Psychologii we Wrocławiu
, Kamil Fuławka
Kamil Fuławka,,
-
, Dominik Lenda
Dominik Lenda,,
-
, Tomasz Zaleśkiewicz (Filia we Wrocławiu / Wydział Psychologii we Wrocławiu)
Tomasz Zaleśkiewicz,,
- Wydział Psychologii we Wrocławiu
Journal seriesJournal of Behavioral Decision Making, ISSN 0894-3257, e-ISSN 1099-0771, (N/A 100 pkt)
Issue year2021
Vol34
No2
Pages228-246
Publication size in sheets0.9
Keywords in Englishaffect; consistency; decision context; numeracy; probability processing
ASJC Classification1201 Arts and Humanities (miscellaneous); 1408 Strategy and Management; 1800 General Decision Sciences; 3202 Applied Psychology; 3312 Sociology and Political Science
DOIDOI:10.1002/bdm.2206
URL https://onlinelibrary.wiley.com/doi/10.1002/bdm.2206
Languageen angielski
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Consistency_tekst.pdf 25.63 MB
Additional file
Consistency-oswiadczenie_Traczyk.pdf 281.52 KB
Consistency-oswiadczenie_Zaleskiewicz.pdf 225.2 KB
Score (nominal)100
Score sourcejournalList
Publication indicators Scopus SNIP (Source Normalised Impact per Paper): 2018 = 0.963; WoS Impact Factor: 2017 = 1.788 (2) - 2017=2.962 (5)
Citation count*1 (2021-04-14)
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
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