Lottery Task Research Articles

Exploring the Interplay of Risk Attitude and Organic Food Consumption

This exploratory study seeks to advance the research on consumers’ preference for organic food eating by investigating the potential association between organic food consumption (OC) frequency and the individual risk attitude. Moreover, inspired by the literature, we investigate also the association between OC and the perceived OC related health improvement (i.e. the avoidance of health risks), subjective trust toward the certification, social norms and several lifestyle factors. Based on a direct survey of 223 Italian college students, a lottery task was used to characterize the individual risk attitude and a simultaneous equation model was estimated. This study marks a beginning by showing a significant relationship between being risk averse and a high organic food eating, offering a hint for future research avenues in the organic domain.

The Cards and Lottery Task: Validation of a New Paradigm Assessing Decision Making Under Risk in Individuals With Severe Obesity.

BackgroundA growing body of research demonstrated impaired executive functions in individuals with severe obesity, including increased sensitivity to reward and impulsive decision making under risk conditions. For the assessment of decision making in patients with severe obesity, studies widely used the Iowa Gambling Task (IGT) or the Delay Discounting Task (DDT), which cover short-term or long-term consequences of decisions only. A further development originating from the field of addiction research is the Cards and Lottery Task (CLT), in which each decision made has conflicting immediate and long-term consequences at the same time. The present study aimed to validate the CLT in individuals with severe obesity.MethodsPatients with severe obesity (N = 78, 67% women, 42.9 ± 10.4 years old, body mass index of 48.1 ± 8.3 kg/m2) were included. Convergent validity was evaluated using the computerized Delay Discounting Task and well-established self-report questionnaires assessing different aspects of impulsivity. For discriminant validity, CLT performance was compared between symptom groups characterized by high versus low impulsivity. The task’s clinical validity was evaluated based on associations with general and eating disorder psychopathology, and body mass index. Test-retest reliability was determined by administering the CLT in n = 31 participants without weight-loss treatment one year later. The task’s sensitivity to change due to weight loss was evaluated by retesting n = 32 patients one year after receiving obesity surgery.ResultsThe number of advantageous decisions in the CLT was significantly positively associated with delay discounting and effortful control, and significantly negatively correlated with behavioral impulsivity. CLT performance differed significantly between individuals with and without symptoms of attention-deficit/hyperactivity disorder and between samples with severe obesity and healthy controls. Clinically, CLT performance was significantly associated with general, but not eating disorder psychopathology. The CLT showed moderate test-retest reliability after one year in weight-stable individuals and was sensitive to change in those undergoing obesity surgery.ConclusionsThis study identified the CLT to be a highly promising, new complex measure of short- and long-term decision making with good reliability and validity in individuals with severe obesity. Future studies should assess its association with the IGT and predictive value for real-life health behavior.

Behavior when the chips are down: An experimental study of wealth effects and exchange media

In this experimental study, we implement a lottery-type game that is similar to the investment game of Imas (2016) and Gneezy and Potters (1997) to examine if the form of the exchange medium influences wealth effects and risk taking in general. We argue that reduced moneyness should lead to increased risk taking and decreased wealth effects (i.e., the break-even and house-money effects). We find that when the lottery task is conducted using tokens (with monetary value), there is a significant break-even effect but an insignificant house-money effect. However, when the lottery task is conducted using a digital media of exchange, what we label “e-coins,” there is a significant house-money effect and no break-even effect. Finally, with cash, there are both significant break-even and house-money effects. We find that subjects risk a bit more when using tokens compared to cash, but risk significantly more when using e-coins.

Examining the roles of intuition and gender in magical beliefs

Four studies explored gender differences in magical beliefs, specifically examining whether reliance on intuition accounts for women’s higher magical beliefs (vs. men’s). In Studies 1a and 1b (N’s = 489, 1119), women’s higher magical beliefs were accounted for by measures of reliance on intuition. Study 2 (N = 533) demonstrated that an intuition induction heightened men’s magical beliefs (vs. control group), but not women’s. In Study 3 (N = 404), women—but not men—exhibited more suboptimal choices in a lottery task after imagining that a dream told them to do so. These studies suggest that reliance on intuition helps account for women’s higher magical beliefs.

Effects of experience, choice architecture, and cognitive reflection in strategyproof mechanisms

We study how performance in strategyproof mechanisms is affected by experience with the decision environment, choice architecture (selection among strategically equivalent mechanisms), and cognitive reflection. In both individual and strategic decisions, we observe substantial gaps in performance between high reflective and low reflective participants. We also find that choice architecture and experience narrow these gaps in performance. Our primary finding is that experience serves as a substitute for cognitive reflection: Across a series of experiments employing multiple rounds of a lottery task, a second price sealed bid auction, an English clock auction, and a random serial dictatorship allocation mechanism, we consistently find that the performance of low reflection participants with experience is similar to that of high reflection participants without experience. For the mechanisms we study, we also find that switching from a strategyproof to an ‘obviously strategyproof’ mechanism generally has a larger effect on performance than experience.

Assortative matching and social interaction: A field experiment on adolescents’ risky choices

We propose a novel empirical strategy to distinguish two sources of peer effects in risky choices: (i) assortative matching in the formation of the peer relationship, and (ii) social interaction effects arising in the choice situation. We combine network information on existing peer relationships with controlled randomised exposure to social interaction conditions. We apply this strategy in a field experiment on risky decision making among adolescents between ages 13 and 15. School classes were randomly allocated to two social interaction treatments. Students were allowed to discuss their choices with a natural peer – either a friend or a randomly selected classmate – before individually making choices in an incentivised lottery task. In the control group, adolescents made choices without being able to discuss them with a peer. In a dyadic analysis, we find that friends and classmates are matched on socio-demographic characteristics but are not assortatively matched on risk preferences. In contrast, social interaction strongly increases the similarity of teenagers’ risky choices. A large fraction of peers align their choices perfectly.

Estimating uncertainty aversion using the source method in stylized tasks with varying degrees of uncertainty

The source method provides a tractable way to analyze uncertainty aversion using source functions. In this analytical framework, uncertainty aversion is defined using the index of pessimism and the index of likelihood insensitivity. The focus of this paper is to use the source method to examine how uncertainty aversion differs across events that have the same underlying objective probabilities but are presented under varying degrees of uncertainty. In a controlled laboratory setting, subjects are presented with three lottery tasks that are ranked in order of increasing uncertainty. Given the choices observed in each task, a “source function” is estimated jointly with risk attitudes assuming Rank-Dependent Utility Theory under different probability weighting specifications for the source function. Results from the Prelec (Prelec (1998)) specification suggest that, as the degree of uncertainty increases, subjects display increasing pessimism; in contrast, the Tversky-Kahneman (Tversky-Kahneman (1992)) and the Power specifications detect no such difference. Thus, conclusions regarding uncertainty aversion are contingent upon which probability weighting specification is assumed for the source function, and caution should be taken when selecting specifications for the source function.

Title: Trading off probability and reward in structured lottery tasks

Title: Trading off probability and reward in structured lottery tasks

That\u2019s not fair! unfair treatment spills over into individual risky financial decisions

Studies indicate that experiencing unfairness may influence subsequent decisions. There is initial evidence that this is also true for gambling decisions made after an experience of unfair treatment in a financial domain. The presented studies test whether this can be extended to other domains of financial risk-taking, such as investments. Moreover, we aim to investigate whether the effects of such experience in one domain generalize to other domains. Three experimental studies were conducted to investigate how unfair treatment coming from varied domains affects individuals’ propensities to make risky investment and gambling choices in subsequent tasks. The experience of being a victim or a beneficiary of unfair treatment in financial and non-financial domains was induced and the propensity to take investment and gambling risks was measured. The results of the experiments indicated that the experience of unfairness influences the propensity to make risky financial choices but the domain in which it is experienced plays an important role. Being a victim of financial unfairness makes people more prone to take investment risk and build riskier investing portfolios with more stocks and fewer bonds than when they are beneficiaries or when they are treated fairly. Moreover, being the beneficiary of unfair treatment in a financial domain makes people less prone to choose a sure option (vs risky) in lottery tasks. The abovementioned relationships are exactly the opposite when the experience of (un)fairness comes from a task in a non-financial context. Specifically, the experience of unfair treatment in a non-financial domain leads people to be less prone to make risky investment choices, and it enhances the propensity to build safer investment portfolios with more bonds and fewer stocks than people from the unfair-beneficiary and fair groups. Furthermore, being the beneficiary of unfair treatment in a non-financial context makes people more prone to choose sure option in lottery task.

Contextual Framing and Monetary Incentives in Field Experiments on Risk Preferences: Evidence from German Farmers

AbstractRecent studies cast doubt on the ability of abstract experiments to predict decision‐making in the field. Thus, scholars have argued for more ‘realism’ by introducing context to field experiments. Yet, such realism may work against the induced values of monetary incentives in economic experiments. It is an open question whether contextual framing works best with or without inducing values, through methods such as the use of monetary incentives. Using a sample of 146 German farmers, we compare experimentally the predictive power of a framed lottery in an agricultural context vs. using an abstract version. For one half of the sample, lotteries are incentivised; for the other half, they are hypothetical. Although risk preferences differ between treatments, all four lottery tasks correlate poorly with farmers’ real‐world use of risk management instruments such as harvest or hail insurance. Subjects who start with an agricultural framing are willing to take significantly greater risks in the lotteries. More generally, our findings cast doubt on the ability of lottery tasks to predict risk‐taking in the field.

Win-Concurrent Sensory Cues Can Promote Riskier Choice.

Reward-related stimuli can potently influence behavior; for example, exposure to drug-paired cues can trigger drug use and relapse in people with addictions. Psychological mechanisms that generate such outcomes likely include cue-induced cravings and attentional biases. Recent animal data suggest another candidate mechanism: reward-paired cues can enhance risky decision making, yet whether this translates to humans is unknown. Here, we examined whether sensory reward-paired cues alter decision making under uncertainty and risk, as measured respectively by the Iowa Gambling Task and a two-choice lottery task. In the cued versions of both tasks, gain feedback was augmented with reward-concurrent audiovisual stimuli. Healthy human volunteers (53 males, 78 females) performed each task once, one with and the other without cues (cued Iowa Gambling Task/uncued Vancouver Gambling Task: n = 63; uncued Iowa Gambling Task/cued Vancouver Gambling Task: n = 68), with concurrent eye-tracking. Reward-paired cues did not affect choice on the Iowa Gambling Task. On the two-choice lottery task, the cued group displayed riskier choice and reduced sensitivity to probability information. The cued condition was associated with reduced eye fixations on probability information shown on the screen and greater pupil dilation related to decision and reward anticipation. This pupil effect was unrelated to the risk-promoting effects of cues: the degree of pupil dilation for risky versus risk-averse choices did not differ as a function of cues. Together, our data show that sensory reward cues can promote riskier decisions and have additional and distinct effects on arousal.SIGNIFICANCE STATEMENT Animal data suggest that reward-paired cues can promote maladaptive reward-seeking by biasing cost-benefit decision making. Whether this finding translates to humans is unknown. We examined the effects of salient reward-paired audiovisual cues on decision making under risk and uncertainty in human volunteers. Cues had risk-promoting effects on a risky choice task and independently increased task-related arousal as measured by pupil dilation. By demonstrating risk-promoting effects of cues in human participants, our data identify a mechanism whereby cue reactivity could translate into maladaptive behavioral outcomes in people with addictions.

Induction and Relief of Curiosity Elicit Parietal and Frontal Activity.

Curiosity is a basic biological drive, but little is known about its behavioral and neural mechanisms. We can be curious about several types of information. On the one hand, curiosity is a function of the expected value of information, serving primarily to help us maximize reward. On the other hand, curiosity can be a function of the uncertainty of information, helping us to update what we know. In the current studies, we aimed to disentangle the contribution of information uncertainty and expected value of rewards to curiosity in humans. To this end, we designed a lottery task in which uncertainty and expected value of trial outcomes were manipulated independently and examined how neural activity and behavioral measures of curiosity were modulated by these factors. Curiosity increased linearly with increased outcome uncertainty, both when curiosity was explicitly probed as well as when it was implicitly tested by people's willingness to wait. Increased expected value, however, did not strongly relate to these curiosity measures. Neuroimaging results showed greater BOLD response with increasing outcome uncertainty in parietal cortex at the time of curiosity induction. Outcome updating when curiosity was relieved resulted in an increased signal in the insula, orbitofrontal cortex, and parietal cortex. Furthermore, the insula showed a linear increase corresponding to the size of the information update. These results suggest that curiosity is monotonically related to the uncertainty about one's current world model, the induction and relief of which are associated with activity in parietal and insular cortices, respectively.SIGNIFICANCE STATEMENT Humans are curious by nature. When you hear your phone beep, you probably feel the urge to check the message right away, even though the message itself likely does not give you a direct reward. In this study, we demonstrated that curiosity can be driven by outcome uncertainty, over and above of reward. The induction of curiosity was accompanied by increased activity in the parietal cortex, whereas the information update at the time of curiosity relief was associated with activity in insular cortex. These findings advance our understanding of the behavioral and neural constituents of curiosity, which lies at the core of human information seeking and serves to optimize the individual's current world model.

Free choice shapes normalized value signals in medial orbitofrontal cortex

Normalization is a common cortical computation widely observed in sensory perception, but its importance in perception of reward value and decision making remains largely unknown. We examined (1) whether normalized value signals occur in the orbitofrontal cortex (OFC) and (2) whether changes in behavioral task context influence the normalized representation of value. We record medial OFC (mOFC) single neuron activity in awake-behaving monkeys during a reward-guided lottery task. mOFC neurons signal the relative values of options via a divisive normalization function when animals freely choose between alternatives. The normalization model, however, performed poorly in a variant of the task where only one of the two possible choice options yields a reward and the other was certain not to yield a reward (so called: “forced choice”). The existence of such context-specific value normalization may suggest that the mOFC contributes valuation signals critical for economic decision making when meaningful alternative options are available.

The human globus pallidus internus is sensitive to rewards – Evidence from intracerebral recordings

BackgroundThe globus pallidus internus (GPi) is the final output relay of the basal ganglia for the control of movements but has also been shown to belong to a second pathway projecting to the lateral habenula. This latter pathway is related to reward processing. MethodThis prompted us to record, in eight patients receiving deep brain stimulation of the GPi for the alleviation of various movement disorders, local field potentials (LFP) while these patients performed a lottery task. The task entailed choosing between a higher and a lower number, which changed their color after the patient's choice with red (green) signaling a loss (win, in Euro cents) corresponding to the chosen number. ResultsSurface recordings showed a feedback related negativity from a frontal midline site, while time domain averages in the GPi showed differential modulation depending on the valence of the stimulus with polarity inversion indicating that this reward-modulated activity was indeed generated locally. Furthermore, wavelet decomposition of the LFP showed a reward-related response in the high beta/low gamma range. ConclusionWe conclude that human GPi is involved in reward processing, possibly in relation to the lateral habenula.

The Attraction Effect Modulates Reward Prediction Errors and Intertemporal Choices

Classical economic theory contends that the utility of a choice option should be independent of other options. This view is challenged by the attraction effect, in which the relative preference between two options is altered by the addition of a third, asymmetrically dominated option. Here, we leveraged the attraction effect in the context of intertemporal choices to test whether both decisions and reward prediction errors (RPE) in the absence of choice violate the independence of irrelevant alternatives principle. We first demonstrate that intertemporal decision making is prone to the attraction effect in humans. In an independent group of participants, we then investigated how this affects the neural and behavioral valuation of outcomes using a novel intertemporal lottery task and fMRI. Participants9 behavioral responses (i.e., satisfaction ratings) were modulated systematically by the attraction effect and this modulation was correlated across participants with the respective change of the RPE signal in the nucleus accumbens. Furthermore, we show that, because exponential and hyperbolic discounting models are unable to account for the attraction effect, recently proposed sequential sampling models might be more appropriate to describe intertemporal choices. Our findings demonstrate for the first time that the attraction effect modulates subjective valuation even in the absence of choice. The findings also challenge the prospect of using neuroscientific methods to measure utility in a context-free manner and have important implications for theories of reinforcement learning and delay discounting. <b>SIGNIFICANCE STATEMENT</b> Many theories of value-based decision making assume that people first assess the attractiveness of each option independently of each other and then pick the option with the highest subjective value. The attraction effect, however, shows that adding a new option to a choice set can change the relative value of the existing options, which is a violation of the independence principle. Using an intertemporal choice framework, we tested whether such violations also occur when the brain encodes the difference between expected and received rewards (i.e., the reward prediction error). Our results suggest that neither intertemporal choice nor valuation without choice adhere to the independence principle.

In the Heat and Noise of the Moment: Effects on Risky Decision Making

Two studies, comprising 128 participants, were conducted to examine possible detrimental effects of noise and moderate heat stress on decision making. Three tasks involving risky decisions were used: a lottery choice task, the Balloon Analogue Risk Task, and two risk scenario questionnaires. Study 1 ( n = 97) involved three noise stressors presented at 60dB(A) and a quiet condition. Compared with all other conditions, a radio podcast about the jubilee of museums caused a significant increase in risk aversion in the Choice Dilemma Questionnaire task. Study 2 ( n = 31) compared two groups that completed the aforementioned tasks either in a warm (≥ 30°C) or neutral (≤ 25°C) ambient temperature condition. Participants made significantly riskier decisions in the warm ambient temperature condition in all tasks except the lottery task. Effects were more pronounced among female subjects. Especially elevated ambient temperatures should, therefore, be monitored in office environments to prevent impairments of decision making.

The Attraction Effect Modulates Reward Prediction Errors and Intertemporal Choices.

Many theories of value-based decision making assume that people first assess the attractiveness of each option independently of each other and then pick the option with the highest subjective value. The attraction effect, however, shows that adding a new option to a choice set can change the relative value of the existing options, which is a violation of the independence principle. Using an intertemporal choice framework, we tested whether such violations also occur when the brain encodes the difference between expected and received rewards (i.e., the reward prediction error). Our results suggest that neither intertemporal choice nor valuation without choice adhere to the independence principle.

The Roommate's Dilemma: An Experimental Analysis of Choice Bracketing in Games

A subject brackets two decisions if she choose[s] an option in each case without full regard to the other. Although in most situations such behavior is unlikely to be optimal, it is well documented in experiments where subjects make decisions in the absence of strategic considerations. This paper uses an economic experiment to investigate whether subjects also bracket their decisions in games. Subjects played two Volunteer's Dilemmas at the same time, with the payoffs from both games added to their earnings. In a lottery task, subjects were generally revealed to be risk-averse narrow bracketers. Aggregate play in the Roommate's Dilemma is not consistent with predictions made by assuming all subjects either narrowly or broadly bracket. On the individual level, structural modeling suggests that most subjects bracket narrowly in the game.

Risky Decisions in a Lottery Task Are Associated with an Increase of Cocaine Use.

Cocaine use disorder is associated with maladaptive decision-making behavior, which strongly contributes to the harmful consequences of chronic drug use. Prior research has shown that cocaine users exhibit impaired neuropsychological test performances, particularly with regard to attention, learning, and memory but also in executive functions such as decision-making and impulse control. However, to what extent cocaine users show impaired decision-making under risk without feedback has not yet been investigated systematically. Therefore, to examine risk-taking behavior, 31 chronic cocaine users and 26 stimulant-naïve healthy controls who were part of the Zurich Cocaine Cognition Study, performed the Randomized Lottery Task (RALT) with winning lotteries consisting of an uncertain and a certain prospect. Results revealed that risky decisions were associated with male sex, increased cocaine use in the past year, higher cocaine concentrations in the hair, and younger age. In addition, higher levels of cocaine in the hair and cumulative lifetime consumption were associated with risky decisions, whereas potentially confounding factors including cognition and psychiatric symptoms had no significant effect. Taken together, our results indicate that cocaine users who increased their consumption over a period of 1 year show deficits in the processing of risky information accompanied with increased risk-taking. Future research should analyse whether risky decisions could potentially serve as a prognostic marker for cocaine use disorder.

An Experimental Comparison of Risky and Riskless Choice—Limitations of Prospect Theory and Expected Utility Theory

Prospect theory, used descriptively for decisions under both risk and certainty, presumes concave utility over gains and convex utility over losses; a pattern widely seen in lottery tasks. Although such discontinuous gain-loss reference-dependence is also used to model riskless choices, only limited empirical evidence supports this use. In incentive-compatible experiments, we find that gain-loss reflection effects are not observed under riskless choice as predicted by prospect theory, even while in the same subjects gain-loss reflection effects are observed under risk. Our empirical results challenge the application of choice models across both risky and riskless domains. (JEL C91, D12, D81)