The reversed description-experience gap: Disentangling sources of presentation format effects in risky choice.

Abstract

Previous literature has suggested that risky choice patterns in general--and probability weighting in particular--are strikingly different in experience-based as compared with description-based formats. In 2 reanalyses and 3 new experiments, we investigate differences between experience-based and description-based decisions using a parametric approach based on cumulative prospect theory (CPT). Once controlling for sampling biases, we consistently find a reversal of the typical description-experience gap, that is, a reduced sensitivity to probabilities and increased overweighting of small probabilities in decisions from experience as compared with decisions from descriptions. This finding supports the hypothesis that regression to the mean effects in probability estimation are a crucial source of differences between both presentation formats. Further analyses identified task specific information asymmetry prevalent in gambles involving certainty as a third source of differences. We present a novel conceptualization of multiple independent sources of bias that contribute to the description-experience gap, namely sampling biases and task specific information asymmetry on the one hand, and regression to the mean effects in probability estimation on the other hand.