The relationship between search strategy and risky choice

Abstract

This paper describes a study of the information search patterns used by decision makers to make choices among options with unknown outcomes. The study involved 48 students from Flinders University and Melbourne University who were administered 25 decision trials on which they could win or lose money. Information search behaviour was measured by the DEAN procedure (Ball & Mann, 1991), a process-tracing package for recording and analysing information search patterns for problems presented in decision matrix format. The relationship between information search behaviour and risky choice was examined. It was found that the individual's search processes and strategies are related to the nature of subsequent choices. Individuals who searched little information were more likely to choose risky, money-losing options. The findings, which demonstrate consistency between search and choice, indicate that different parts of the decision-making process are coherent.