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Matching and Behavioral Contrast in a Two‐Option Repeated Investment Simulation
Author(s) -
Hantula Donald A.,
Crowell Charles R.
Publication year - 2015
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2717
Subject(s) - contrast (vision) , replicate , matching (statistics) , investment (military) , behavioral economics , economics , phase contrast microscopy , econometrics , financial economics , microeconomics , mathematics , computer science , statistics , physics , optics , artificial intelligence , politics , political science , law
Matching and behavioral contrast were explored in an investment simulation with young adults who made repeated investments in two different markets that provided intermittent, non‐predictable returns. In the first phase in which the markets provided equivalent returns, participants matched. In a second phase in which one market ceased to provide returns while the other market remained unchanged, participants showed behavioral contrast by decreasing investment in the non‐producing market and dramatically increasing investing in the unchanged market. A third phase restored the original return rates and matching was observed. In a fourth phase, one market ceased to provide returns while the other market remained unchanged, and less robust evidence of behavioral contrast was found. These results replicate and extend previous research are one of the few demonstrations of behavioral contrast in adults, are consistent with matching theory and show that options are valued relatively, not absolutely. Copyright © 2015 John Wiley & Sons, Ltd.