Graduation Year

2008

Document Type

Thesis

Degree

M.A.

Degree Granting Department

Psychology

Major Professor

Sandra L. Schneider, Ph.D.

Keywords

Risk, Context, Dynamic, Aspiration, Trajectory

Abstract

This investigation of risky decision making models the standard forced-choice two outcome lottery task by incorporating elements of complexity present in real-world decision making. Potential decision criteria such as current wealth and quality of life information were made available to examine the influence of time-dependent contextual cues on decision strategy selection, since previous investigations of decision making have not included specific contextual cues that would allow for people to use complex or "dynamic" decision strategies. Two studies explored simulated decision strategies requiring more or less complexity. Results suggest that strategies using dynamic, time-dependent criteria provide important advantages over simpler strategies.

Also, as 'aspirations' become closer to the most likely outcome and as trajectories include a larger margin of previous experiences, there is more control over improvements to the likelihood of ending up in an extremely good place over an extremely bad place. Certain changes to the decision environment seem to affect the accuracy of dynamic decision strategies, which in turn can help or hinder their effectiveness. As a test of convergence, an empirical test was conducted to compare actual decision strategy use with simulated decision strategies. Two distinctly different decision tasks were used: one required only passive choices between two lotteries and the other required active changes to a given lottery situation. Information about lottery outcomes, current wealth, and quality of life were provided to participants to provide additional context to the decision environment.

Participants seemed to be using a variety of different strategies, including strategies that focus on dynamic information. Simple risk policies were often very good at describing risk preferences, though a subset of participants were relying on a complex decision strategies. There were also systematic differences in dynamic decision strategy usage. The combination of simulations and the empirical investigation elucidate the advantages to exploring risk preferences with attention to different decision strategies in specific environments, especially including more complex or "dynamic" decision strategies.

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