The Affect Heuristic and the Attractiveness of Simple Gambles
Journal of Behavioral Decision Making, Vol. 20, pp. 365-380, 2007
Posted: 22 Jul 2010
Date Written: 2007
Abstract
Prior studies have observed that, in separate evaluation, the attractiveness of playing a simple gamble (7/36 to win $9; otherwise win nothing) is greatly enhanced by introducing a small loss (7/36 win $9; otherwise lose 5¢). The present studies tested and confirmed an explanation of this finding based on the concept of evaluability and the affect heuristic. Evaluators of the "no-loss" gamble lack a precise feeling for how good $9 is, hence give it little weight in their judgment. The unattractive probability (7/36) determines the response. In the second gamble, comparison with the small loss makes $9 "come alive with feeling" and become weighted in the judgment, increasing attractiveness of the gamble. These results demonstrate the importance of contextual factors in determining affect and preference for simple risktaking opportunities. They show that the meaning, utility, and weighting of even a very familiar monetary outcome such as $9 is not fixed, but depends greatly on these contextual factors
Keywords: affect heuristic, preference construction, evaluability, gambles
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