Outcome uncertainty influences probability perception and risk attitudes.

Thomas Ward Elston,Victor Mittelstädt,Ian Grant Mackenzie

doi:10.1098/rsos.210307

Thomas Ward Elston, Victor Mittelstädt + Show 1 more

Open Access

https://doi.org/10.1098/rsos.210307

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Abstract

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.

Highlights

We are regularly confronted with choices that involve balancing risks—for example, whether to get vaccinated given the risk of certain side effects
We obtained a qualitatively similar result pattern for Experiment 2, where context was a within-subject factor and data were assessed with a repeated-measures ANOVA. These results indicate that participants preferred the experience options across all probabilities when seeking gains and, preferred the description options across all probabilities when mitigating losses
We assessed the DE gap as human participants made decisions between informative, described and uninformative, experience options where the difference between the probabilistic values of the choice options varies across trials

Summary

Introduction

We are regularly confronted with choices that involve balancing risks—for example, whether to get vaccinated given the risk of certain side effects. We can learn how probable such outcomes are either by explicit description (we are told that the probability of side effects is 1%) or inferred via experience (personally experiencing side effects or knowing people who have). Human monetary gambling studies suggest that rare described options are perceived as more likely to occur than they are whereas the opposite is the case with options whose probabilistic outcomes have been inferred through repeated experience [1]. This phenomenon, where probability perception depends on whether outcome probabilities were learned either through description or experience, is known as the description–experience (DE) gap [3]

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Conclusion