The Future of Decisions from Experience: Connecting Real-World Decision Problems to Cognitive Processes

Abstract

Decision from experience (DfE) is an experimental paradigm to examine preferential decision making under uncertainty. In this paradigm, participants choose which uncertain option they prefer and receive feedback about the (monetary) values of the available options. DfE first sparked interest because of deviations in choice from the standard decision-from-description presentation format (i.e., the description-experience gap). Going beyond this gap, this article highlights the potential of DfE as a stand-alone paradigm to better understand the psychology of decision-making. First, we synthesize how recent research has explored the processes of attention, perception, memory, learning, and pattern recognition in DfE. Understanding these basic cognitive processes can advance the modeling and prediction of preference-based economic behavior. In addition, we review how the standard DfE task can be extended to become a useful tool to approach important societal problems. This extension involves incorporating descriptive summary information, examining delayed feedback, and introducing social interactions. In sum, we highlight the potential of the DfE paradigm for theory integration and policy intervention across the behavioral, decision, and cognitive sciences.

Attention! Do We Really Need Attention Checks?

“…By contrast, based on previous studies, inattentive participants are hypothesized to pay less attention to rare outcomes (i.e., to underweight rare events; Hertwig et al 2004;Yakobi et al 2020), resulting in higher checking rates. Still, it is also possible that although inattentive participants are less alert to the implications of feedback in general, they will be more sensitive to the most important rare events (Olschewski et al 2023), resulting in lower checking rates in the aggregate. The current study examines these contradictory hypotheses.…”

“…Still, it is also possible that although inattentive participants are less alert to the implications of feedback in general, they will be more sensitive to the most important rare events (Olschewski et al. 2023), resulting in lower checking rates in the aggregate. The current study examines these contradictory hypotheses.…”

Affective integration in experience, judgment, and decision-making

“…The main problem here is that even though these theories may admit that preferences can be influenced by changes in decision-maker's internal state and/or context, they assume no dependence between two states of the decision-maker. Recently, theories suggesting that this is far from how people make decisions in everyday life instead model human decision making as a dynamic processwe learn about choices from case-by-case observations (decisions-fromexperience) 26,29,30 . For example, models focused on sampling of information all together reject the notion of utilities 26 .…”

Rare and extreme outcomes in risky choice

“…To date, decision-making research has generally examined how people respond to event rarity and outcome extremity separately. For example, many studies have examined the effect of rare events on monetary gambles, financial risk-taking and medical decisions (Lejarraga et al, 2016) as well as on climate action decisions (Newell et al, 2016;Liang et al, 2019;Olschewski et al, 2023). Separate lines of research have examined risk preferences involving extreme outcomes (Madan et al, 2014;Konstantinidis et al, 2018).…”