Graduation Year

2010

Document Type

Thesis

Degree

M.A.

Degree Granting Department

Psychology

Major Professor

Sandra L. Schneider, Ph.D.

Co-Major Professor

Michael Coovert, Ph.D.

Committee Member

Jennifer Bosson, Ph.D.

Keywords

Prospect Theory, Security, Aspiration, Risky/Cautious Shift, Context

Abstract

The thesis compared the likelihood of taking risks in dyads and individuals in

varying situations. Patterns of risky decision making were examined in the standard risky

choice task and a novel risk management task. The relative successes of two theories of

risky decision making were assessed: Prospect Theory emphasizes perceptual and

psychophysical processes, whereas Security-Potential/Aspiration Level Theory

emphasizes dispositional and motivational processes. The thesis also examined dyads’

decision behavior in light of competing social influence perspectives regarding risky

versus cautious shifts and group polarization.

Participants, as individuals or as part of a dyad, made decisions in 23 trials about

hypothetical two-outcome monetary gambles in one of two different tasks. Risky choice

involved making choices between two given 50-50 lotteries which varied in riskiness

(i.e., outcome variability), whereas risk management required actively manipulating an

existing 50-50 risk by changing outcome values. The 23 trials were equivalent across

tasks. Dyad participants communicated via an instant messenger program, while viewing

the same lotteries on different computers. Data on risk preferences across gain and loss

domains were analyzed using a mixed factorial ANOVA design.

Consistent with Prospect Theory value function predictions, the risky choice task

led to risk averse preferences for gains and risk seeking preferences for losses, though

risk seeking was weak. Consistent with SP/A theory predictions, the risk management

task led to overall risk averse preferences, with movement toward risk taking for gains.

In addition, there was some evidence of social influences in that dyads tended to be more

conservative than individuals in their decision behavior when dealing with undesirable

outcomes. Thus, a cautious shift was observed, but only for lotteries involving

guaranteed losses. This could not be explained by group polarization.



Each of the theories received some support, but none of them could explain all of

the findings. Recommendations were made to give greater attention to defining and

measuring risk attitudes and dispositions, and to continue exploring differences in

decision situations and social settings to obtain a more comprehensive understanding of

risky decision making processes. Findings here suggest the need for an overarching

theory that can account for a wide variety of influences. A dual processes approach was

recommended as one promising avenue. Social and situational influences may prove an

essential part of understanding risky decision making in real life contexts.

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