Open AccessOutcome uncertainty influences probability perception and risk attitudes
Author(s) -
Thomas W. Elston,
Ian Grant Mackenzie,
Victor Mittelstädt
Publication year - 2021
Publication title -
royal society open science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.84
H-Index - 51
ISSN - 2054-5703
DOI - 10.1098/rsos.210307
Subject(s) - perception , inference , psychology , outcome (game theory) , prospect theory , risk perception , cumulative prospect theory , probabilistic logic , contrast (vision) , social psychology , cognitive psychology , econometrics , computer science , statistics , economics , mathematics , artificial intelligence , microeconomics , neuroscience
Subjective inferences of probability play a critical role in decision-making. How we learn about choice options, through description or experience, influences how we perceive their likelihoods, an effect known as the description–experience (DE) gap. Classically, the DE gap details how low probability described options are perceptually inflated as compared to equiprobable experience ones. However, these studies assessed probability perception relative to a ‘sure-bet’ option, and it remained unclear whether the DE gap occurs when humans directly trade-off equiprobable description and experience options and whether choice patterns are influenced by the prospects of gain and loss. We addressed these questions through two experiments where humans chose between description and experience options with equal probabilities of either winning or losing points. Contrary to early studies, we found that gain-seeking participants preferred experience options across all probability levels and, by contrast, loss-mitigating participants avoided the experience options across all probability levels, with a maximal effect at 50%. Our results suggest that the experience options were perceived as riskier than descriptive options due to the greater uncertainty associated with their outcomes. We conclude by outlining a novel theory of probabilistic inference where outcome uncertainty modulates probability perception and risk attitudes.