The Effect of Immediacy and Delay on Affective Reactions Toward Sure and Risky Gambles

Six studies investigated people's attitudes toward uncertainty. Participants rated the attractiveness of pairs of gambles in either a gain or a loss frame. We varied the level of uncertainty, the monetary outcomes, and the evaluation mode of the gambles (i.e., joint versus separate evaluation). Experiments 1a and 1b compared a sure gain (loss) to a risky gain (loss), with both gambles having identical expected value. Experiments 2a and 2b included an almost sure (i.e., 98%) gain (loss) and risky gain (loss). When gambles entailed gains, a risky gamble became less attractive when evaluated in joint than in separate evaluation. The opposite pattern emerged when gambles entailed losses. The difference between a risky and a sure (or almost sure) gamble was weaker (or eliminated) in separate evaluation. Experiments 3a and 3b presented a risky gamble alone or with other gambles with varying probability and outcomes to be gained or lost. When gambles entailed gains (losses), a risky gamble became less (more) attractive and was chosen less (more) frequently when paired with gambles offering a higher probability of gaining (losing) smaller amounts. Overall, affective reactions and preferences for uncertain gambles depend on the decision context, and the certainty effect can disappear in separate evaluation.

Value-based decision-making is presumed to involve a dynamic integration process that supports assessing the potential outcomes of different choice options. Decision frameworks assume the value of a decision rests on both the desirability and risk surrounding an outcome. Previous work has highlighted neural representations of risk in the human brain, and their relation to decision choice. Key neural regions including the insula and anterior cingulate cortex (ACC) have been implicated in encoding the effects of risk on decision outcomes, including approach and avoidance. Yet, it remains unknown whether these regions are involved in the dynamic integration processes that precede and drive choice, and their relationship with ongoing attention. Here, we used concurrent fMRI and eye-tracking to discern neural activation related to visual attention preceding choice between sure-thing (i.e. safe) and risky gamble options. We found activation in both dorsal ACC (dACC) and posterior insula (PI) scaled in opposite directions with the difference in attention to risky rewards relative to risky losses. PI activation also differentiated foveations on both risky options (rewards and losses) relative to a sure-thing option. These findings point to ACC involvement in ongoing evaluation of risky but higher value options. The role of PI in risky outcomes points to a more general evaluative role in the decision-making that compares both safe and risky outcomes, irrespective of potential for gains or losses.

This paper proposes that task format (choosing or rejecting) moderates the effect of ambiguity aversion. Specifically, an ambiguous option is more attractive in a choosing task than in a rejecting task compared with a risky option. The author performed three experiments to test the propositions. In the first experiment, participants showed less ambiguity aversion when they had to choose a preferred option (risky or ambiguous) compared with when they had to reject an option they preferred less. In the second experiment with a monetary incentive, participants had to form a cash‐equivalent estimate for both a risky gamble and an ambiguous gamble in a traditional Ellsberg scenario. The ambiguous option emerged as more attractive than the risky option in the choosing task compared with the rejecting task. The third experiment showed that the participants' decision rationale mediated the effect of the task format on choice. These three experiments support the proposition that task formats moderate the effect of ambiguity aversion. On the basis of the findings, the author provides suggestions for practice and further research. Copyright © 2010 John Wiley & Sons, Ltd.

Experiential processing of events has been argued to result in affective reactions –emotions and feelings – which in turn influence judgment and decision states. Research also suggests that specific experiential processing may carry action-oriented appraisal dimensions that act as implicit perceptual lenses for interpreting subsequent experiences. However, founders with different founding goals may self-select into different founding trajectories that provide them with different experiences and therefore different affective reactions. Therefore, we develop a conceptual model to study experience or event-generated affect within the domain of two common venture goals: small business vs high growth venture goals. Our model unearths insights into affect research in entrepreneurship. Implications for research and practice are also provided.

Decisions concerning risk mitigation generally involve tradeoffs between immediate versus delayed outcomes and certain versus risky ones. The decision in adopting a risk mitigation measure illustrates an intertemporal choice problem under uncertainty. This study explores this relationship between delay and uncertainty in risky intertemporal decision-making. In particular, we focus on the following questions: (1) Do risk preferences depend on the time period over which the outcomes are evaluated? (2) Does the discount factor (rate of time preference) depend on the riskiness of the outcomes being evaluated? (3) Is there an interaction between the effect of delay and uncertainty and, if so, in what direction is this interaction? Contrary to normative predictions, we find that delay and risk discounting are not independent from each other. In particular, the delay discount rate increases for uncertain future outcomes and the risk discount rate decreases with an increase in delay. Thus individuals are more impatient for gambles than for certain outcomes and less risk-averse (more risk-neutral) for delayed outcomes than for immediate ones. The findings also suggest that the simultaneous presence of delay and uncertainty leads to a higher discounting of risky future outcomes than predicted by either effect separately.

Pathological gambling (PG) is an impulse control disorder characterized by excessive monetary risk seeking in the face of negative consequences. We used tools from the field of behavioral economics to refine our description of risk-taking behavior in pathological gamblers. This theoretical framework allowed us to confront two hypotheses: (1) pathological gamblers distort winning probabilities more than controls; and (2) pathological gamblers merely overweight the whole probability range. Method Eighteen pathological gamblers and 20 matched healthy participants performed a decision-making task involving choices between safe amounts of money and risky gambles. The online adjustment of safe amounts, depending on participants' decisions, allowed us to compute 'certainty equivalents' reflecting the subjective probability weight associated with each gamble. The behavioral data were then fitted with a mathematical function known as the 'probability weighting function', allowing us to disentangle our two hypotheses. The results favored the second hypothesis, suggesting that pathological gamblers' behavior reflects economic preferences globally shifted towards risk, rather than excessively distorted probability weighting. A mathematical parameter (elevation parameter) estimated by our fitting procedure was found to correlate with gambling severity among pathological gamblers, and with gambling affinity among controls. PG is associated with a specific pattern of economic preferences, characterized by a global (i.e. probability independent) shift towards risky options. The observed correlation with gambling severity suggests that the present 'certainty equivalent' task may be relevant for clinical use.

Continuing investing in a failing plan (i.e., the sunk-cost fallacy) is a common error that people are inclined to make when making decisions. It is impossible to get resources back that already have been invested. Hence, economic theory implies that decision makers’ decisions should only be guided by future gains and losses. According to the literature, the sunk-cost fallacy is driven by negative affect. Previous studies focused on negative incidental affect. We investigated, in contrast, whether the sunk-cost fallacy is caused by integral affect elicited by the specific decision context. Study 1 demonstrated a positive relationship between affective reaction and the sunk-cost fallacy. Study 2 replicated the finding in Study 1 in a within-subjects design, and demonstrated a full mediation of type of scenario (invest vs. non-invest) on the sunk-cost effect, mediated by integral affective reaction. A mediation using a within-subjects design additionally demonstrated that the effect is mediated by integral emotional responses experienced in relation to each scenario, and not by incidental emotional states that are unrelated to the scenarios. Study 3 replicated findings in the previous studies, and demonstrated that the relation between the sunk-cost fallacy and affect is moderated by justification. Participants who justified their decision were more resistant to the sunk-cost fallacy, and showed less negative affect elicited by the scenarios, than participants who did not justify their decision. Study 4 provided supporting evidence for our hypothesis by hindering conscious deliberation, and promoting reliance on affect, via cognitive load. The results showed that the relation between affect and the sunk-cost fallacy was stronger for participants under high cognitive load, than under low-load. The paper discussed how this research leads to new ways to protect against the sunk-cost fallacy in the discussion.

342 participants made decisions between a larger payout but riskier gamble and a smaller payout but less risky gamble on three response modes: a choice, a rejection and an exchange mode. When the probability ratio between the gambles was large, they preferred the larger payout but riskier gamble more, as amounts of the payout decreased. Their preference for the larger payout but riskier gamble on the rejection mode was weaker than that on the choice mode. On the other hand, there was no difference in extent of the preference between the exchange mode and the choice mode. The results support the hypothesis that preference for a risky option depends on negative emotion.

Asymmetric valuation and belief updating over gain and loss in risky decision making: A behavioral and electrophysiological investigation

Affective reactions toward eight disease-related stigmas and the intention to extend social support were examined in a simulation experiment. The onset of the stigmas was varied as being either controllable or uncontrollable. In addition, the target person was described either as actively coping with the stigma or as not coping. The research question aimed at exploring the effects of onset controllability and coping efforts on expectancies, blame, emotions such as pity, anger and social stress, and on the willingness to support the target person. In a within-groups design each of the eighty-four participants was confronted with all the eight stigmas under four different conditions. It turned out that both experimental factors elicited affective reactions and judgments to help. However, the coping dimension appeared to be stronger for most dependent variables. In addition, helping behavior was mediated by different affective reactions for disparate stigma groupings.

This study manipulated the appropriateness of presidential reactions to images of compelling news events to investigate how a political leader's nonverbal behavior evokes emotional responses and trait attributions. A repeated-measures experiment examining the combined effects of valence and arousal on viewers' affective reactions and trait evaluations was conducted on two voting-age subject pools in different states. Participants were shown a series of four news story-presidential reaction message sequences and were asked to rate a series of felt emotions and communicative traits. Results indicate an evocative function for leader displays that nonperson-specific news images do not share, suggesting a critical role for appropriate nonverbal communication in politics. Inappropriate message sequences elicited negative emotions more intensely than positive emotions and produced uniformly lower trait evaluations, whereas appropriate sequences elicited positive emotions more intensely. Moreover, negative displays were evaluated as significantly more honest, credible, trustworthy, and appropriate than positive displays.

Sleep restriction affects people's decision-making behavior. Nap restriction is a vital subtopic within sleep restriction research. In this study, we used EEG to investigate the impact of nap sleep restriction on intertemporal decision-making (Study 1) and decision-making across risky outcomes (Study 2) from ERP and time-frequency perspectives. Study 1 found that habitual nappers restricting their naps felt more inclined to choose immediate, small rewards over delayed, large rewards in an intertemporal decision-making task. P200s, P300s, and LPP in our nap-restriction group were significantly higher than those in the normal nap group. Time-frequency results showed that the delta band (1 ~ 4Hz) power of the restricted nap group was significantly higher than that of the normal nap group. In Study 2, the nap-restriction group was more likely to choose risky options. P200s, N2s, and P300s in the nap deprivation group were significantly higher than in the normal nap group. Time-frequency results also found that the beta band (11 ~ 15Hz) power of the restricted nap group was significantly lower than that of the normal nap group. The habitual nappers became more impulsive after nap restriction and evinced altered perceptions of time. The time cost of the LL (larger-later) option was perceived to be too high when making intertemporal decisions, and their expectation of reward heightened when making risky decisions-believing that they had a higher probability of receiving a reward. This study provided electrophysiological evidence for the dynamic processing of intertemporal decision-making, risky decision-making, and the characteristics of nerve concussions for habitual nappers.

Although the neural mechanism underlying risk decision has been extensively investigated, the neural origination of risk attitude and probability distortion need to be further elucidated. In this study, the Rescorla–Wagner model with learning rates a+/a- upon gain/loss evaluates the risky outcome and forms the subjective values of risky options through the learning process, and the softmax function of subjective values produces the choice probability between options. Our model demonstrates that risk attitude is determined by the undervaluation/overvaluation of risky outcome, the standard deviation of the subjective value, and the discrimination ability between subjective value. Our model further displays that overweighting/underweighting of small probabilities results from asymmetric learning rates and the discrimination ability between subjective value. These findings suggest that risk attitude and probability distortion share a common neural mechanism.

Decision making is a multifaceted process, consisting of several distinct phases that likely require different cognitive operations. Previous work showed that the basolateral amygdala (BLA) is a critical substrate for decision making involving risk of punishment; however, it is unclear how the BLA is recruited at different stages of the decision process. To this end, the current study used optogenetics to inhibit the BLA during specific task phases in a model of risky decision making (risky decision-making task) in which rats choose between a small, "safe" reward and a large reward accompanied by varying probabilities of footshock punishment. Male Long-Evans rats received intra-BLA microinjections of viral vectors carrying either halorhodopsin (eNpHR3.0-mCherry) or mCherry alone (control) followed by optic fiber implants and were trained in the risky decision-making task. Laser delivery during the task occurred during intertrial interval, deliberation, or reward outcome phases, the latter of which was further divided into the three possible outcomes (small, safe; large, unpunished; large, punished). Inhibition of the BLA selectively during the deliberation phase decreased choice of the large, risky outcome (decreased risky choice). In contrast, BLA inhibition selectively during delivery of the large, punished outcome increased risky choice. Inhibition had no effect during the other phases, nor did laser delivery affect performance in control rats. Collectively, these data indicate that the BLA can either inhibit or promote choice of risky options, depending on the phase of the decision process in which it is active.SIGNIFICANCE STATEMENT To date, most behavioral neuroscience research on neural mechanisms of decision making has used techniques that preclude assessment of distinct phases of the decision process. Here we show that optogenetic inhibition of the BLA has opposite effects on choice behavior in a rat model of risky decision making, depending on the phase in which inhibition occurs. BLA inhibition during a period of deliberation between small, safe and large, risky outcomes decreased risky choice. In contrast, BLA inhibition during receipt of the large, punished outcome increased risky choice. These findings highlight the importance of temporally targeted approaches to understand neural substrates underlying complex cognitive processes. More importantly, they reveal novel information about dynamic BLA modulation of risky choice.

Risk: Empirical Studies on Decision and Choice