Measuring decision confidence

Abstract

We examine whether the way individuals randomize between options captures their decision confidence. In two experiments in which subjects faced pairs of options (a lottery and a varying sure payment), we allowed subjects to choose randomization probabilities according to which they would receive each option. Separately, we obtained two measures of self-reported confidence - confidence statements and probabilistic confidence - for choosing between the two options. Consistent with the predictions of two theoretical frameworks incorporating preference uncertainty, the randomization probabilities correlated strongly with both self-reported measures (median Spearman correlations between 0.86 to 0.89) and corresponded in absolute levels to probabilistic confidence. This relationship is robust to two exogenous manipulations of decision confidence, where we varied the complexity of the lottery and subjects’ experience with the lottery.