Healthy Choices: Regulatory Design and Processing Modes of Health Decisions

Abstract

This article demonstrates experimentally that individuals making decisions about their health management are affected by the decision making environment and that law and policy can serve important roles in improving the decision environment. With the support of a generous grant from the Robert Wood Johnson Foundation, we conducted two series of experiments. First a lab experiment with approximately 700 respondents and next a web-based experiment with over 3000 respondents, including 300 medical doctors. In each of the experiments, in addition to manipulating the decision making environment and choice sets, we manipulated the state of the decision maker. In the first series of experiments we used the psychological mechanism of cognitive depletion and in the second series we tested the effects of cognitive overload. Most broadly, unlike past measures of risk aversion, our studies demonstrate that preferences for risk are not fixed in an individual but rather are highly sensitive to the role, context, and state of the decision maker in patterned ways. The project provides new evidence that cognitive processes affect decision making and judgment of risk, often leading to medically suboptimal choices. The lab studies suggest that often people process risk sub-optimally, e.g. favoring potentially harmful omissions over less harmful acts and being influenced by the order of warnings or choices, rather than their substantive value.