Which is the compromise option? Information format and task format as determinants

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This paper proposes that task format (choosing or rejecting) moderates the effect of ambiguity aversion. Specifically, an ambiguous option is more attractive in a choosing task than in a rejecting task compared with a risky option. The author performed three experiments to test the propositions. In the first experiment, participants showed less ambiguity aversion when they had to choose a preferred option (risky or ambiguous) compared with when they had to reject an option they preferred less. In the second experiment with a monetary incentive, participants had to form a cash-equivalent estimate for both a risky gamble and an ambiguous gamble in a traditional Ellsberg scenario. The ambiguous option emerged as more attractive than the risky option in the choosing task compared with the rejecting task. The third experiment showed that the participants' decision rationale mediated the effect of the task format on choice. These three experiments support the proposition that task formats moderate the effect of ambiguity aversion. On the basis of the findings, the author provides suggestions for practice and further research.

Section: Task Compatibilitysupporting

confidence: 90%

Section: Task Compatibilitymentioning

confidence: 99%

Section: Task Compatibilitymentioning

confidence: 99%

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Task formats and ambiguity aversion

Liu

2011

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“…Choice architects can not only change how something is presented but also what is presented to influence the relative attractiveness of choice options (Chang & Liu, ). Assuming that fixed preferences do not always guide behavior entails that many preferences are constructed in the decision situation and thus depend heavily on the alternatives offered (Ariely, Loewenstein, & Prelec, ; Slovic, ).…”

Section: A Taxonomy Of Choice Architecture Techniquesmentioning

confidence: 99%

A Review and Taxonomy of Choice Architecture Techniques

Münscher

Vetter

Scheuerle

2015

206

211

We present a taxonomy of choice architecture techniques that focus on intervention design, as opposed to the underlying cognitive processes that make an intervention work. We argue that this distinction will facilitate further empirical testing and will assist practitioners in designing interventions. The framework is inductively derived from empirically tested examples of choice architecture and consists of nine techniques targeting decision information, decision structure, and decision assistance. An inter-rater reliability test demonstrates that these techniques can be used in an intersubjectively replicable way to describe sample choice architectures. We conclude by discussing limitations of the framework and key issues concerning the use of the techniques in the development of new choice architectures.

“…Following the choice tasks, they completed four filler tasks in the following four pages (about 5–10 minutes). Two tasks came from research into the compromise effect (Chang & Liu, 2008), and the other two represented modifications from research into feature matching (Houston, Sherman, & Baker, 1991; Slaughter & Highhouse, 2003). Finally, the respondents completed the regulatory focus measure on the final page.…”

Section: Experiments 1: Impact Of Chronic Regulatory Focus On Ambiguitmentioning

confidence: 99%

Impact of regulatory focus on ambiguity aversion

Liu

2011

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Although prior research has shown that some people prefer a risky to an ambiguous option, this study further proposes that people's regulatory focus (promotion vs. prevention) might influence their ambiguity aversion. Three experiments have tested whether people with promotion focus showed less ambiguity aversion than those with prevention focus: The first experiment revealed that, compared with chronically promotion-focused individuals, prevention-focused subjects preferred a risky to an ambiguous option. In the second experiment, priming of the subjects' goal orientations led to similar results. Experiment 3 demonstrated that participants showed less ambiguity aversion for the expected performance of an investment product representative of promotion (e.g., a stock fund) rather than one representative of prevention (e.g., a bond fund). In other words, people showed less preference for a bond fund when the probability distribution of its expected performance was unknown than when it was known, whereas they showed less preference difference between known and unknown probability distributions for the expected performance of a stock fund. This study has integrated research pertaining to regulatory focus and ambiguity aversion, and the results have confirmed that the impact of regulatory focus on ambiguity aversion is robust across different methods and decision tasks.