Ambiguity is often characterized with unknown probability distributions (for potential outcomes), which people avoid while making decisions. Existing literature shows that ambiguity aversion often persists even when these probability distributions are explicitly described to decision makers. We test the hypothesis that exposure to these probability distributions via sampling experience, rather than description, will lead to a reduction in ambiguity aversion. We used the classic two‐colour Ellsberg task in which the participants were asked to choose to bet on either a risky bet (i.e. probabilities were known) or (versions of) an ambiguous bet (i.e. exact probabilities were unknown). Different probability distributions, each providing subtly different information about the underlying properties of the ambiguous bet, were either experienced through sampling or described to participants prior to choice. Overall, the results indicated that people demonstrated ambiguity‐neutral attitudes when the underlying probability distributions were experienced. In contrast, when described, attitudes toward ambiguity changed as a function of the type of probability distribution. Additional analyses confirmed that decision makers were less likely to be ambiguity‐averse when their individual experiences were positive during sampling trials (i.e. observing distributions with winning being more likely or more frequent). Copyright © 2014 John Wiley & Sons, Ltd.

Research on risky and inter-temporal decision-making often focuses on descriptive models of choice. This class of models sometimes lack a psychological process account of how different cognitive processes give rise to choice behavior. Here, we attempt to decompose these processes using sequential accumulator modeling (i.e., the Linear Ballistic Accumulator model; LBA). Participants were presented with pairs of gambles that either involve different levels of probability or delay (Experiment 1) or a combination of these dimensions (both probability and delay; Experiment 2). Response times (RTs) were recorded as a measure of preferential strength. We then combined choice data and response times, and utilized variants of the LBA to explore different assumptions about how preferences are formed. Specifically we show that a model which allows for the subjective evaluation of a fixed now/certain option to change as a function of the delayed/risky option with which it is paired provides the best account of the combined choice and RT data. The work highlights the advantages of using cognitive process models in risky and inter-temporal choice, and points towards a common framework for understanding how people evaluate time and probability.

Abstract

Behavioral findings in several strategic games indicate that people punish others if they think they are being treated unequally, even at the cost of minimizing their own material payoff. We investigated the primary driving force behind such non-self-regarding behavior, so-called, altruistic cooperation. In all of our studies, a mini ultimatum game was played either one-shot (in Experiment 1a and 1b) or repeatedly (Experiment 2), and rejections of inequitable distribution were taken as a measure of altruistic cooperation. In Experiment 1a, we replicated previous findings indicating that the key mechanism contributing to the emergence of altruistic cooperation is fairness considerations. In Experiment 1b, we delved into the relative importance of two aspects of fairness considerations (i.e., outcome fairness and intentions) and showed that both aspects were effective in determining the level of altruistic cooperation, with the contribution of intentions being more important. In Experiment 2, we investigated the effect of the opportunity for reputation building and future interaction on altruistic cooperation. We found that these factors became influential only when fairness considerations were weakened, particularly, as a result of the removal of the possible intentions behind an offer.

Empirical research has revealed that people try to avoid ambiguity in the Ellsberg problem and make choices inconsistent with the predictions of Expected Utility Theory. We hypothesized that people might be forming implicit assumptions to deal with the ambiguity resulting from the incomplete information in the problem, and that some assumptions might lead them to deviate from normative predictions. We embedded the Ellsberg problem in various scenarios that made one source of ambiguity (i.e., the implied distribution of the unknown number of the colored balls) explicit. Results of an experiment showed that more people chose consistently (and hence rationally) when the scenario encouraged them to think that the probability distribution of the number of balls was normal. The results give insight into the implicit assumptions that might lead to choices congruent with normative models.