'Whew that was Close!' How Near Miss Events Bias Subsequent Decision Making under Risk

Abstract

In two experiments, we show clear evidence of a 'near miss' bias, in that when people receive information about prior near miss events (events that could have had a positive or negative outcome, where the outcome was non-fatal) they subsequently make riskier decisions than those who receive no near miss information. We explain the near miss bias as a discounting of given probability information such that people fail to see the independence of events. In Experiment 2, we show that when probability information is made salient and the decision makers attend to this probability information as the basis for their decision, the near miss bias goes away. In Experiment 2, we also see that when people have near miss information they search significantly less for information, even when that information is costless. Results are discussed in terms of accident prevention, Bayesian updating, and the normalization of deviance.