Choice preferences can shift depending on whether outcome and probability information about the options are provided in a description or learned from the experience of sampling. We explored whether this description-experience “gap” could be explained as a difference in probabilistic mindset, that is, the explicit consideration of probability information in the former but not the latter. We replicated the gap but found little evidence to support our main hypothesis. Nevertheless, the data inspired a number of interesting proposals regarding experimental design, preference for probability information, sampling strategies, optimal presentation format, and the probability judgment probe. Keywords: decisions from experience; decisions from description; description-experience; probability; risky choice. Introduction Individuals, businesses, and governments are continually challenged by the prospect of making decisions in the face of uncertainty. For example, Google’s acquisition of the mobile start-up company Android in 2005 was considered a risky move because, at the time, the smartphone industry was dominated by the battle between the iPhone and BlackBerry and few could see room for a new challenger. However, just five years on, Android is now the leading smartphone operating system in the U.S. by market share (Whitney, 2010) and has been deemed by Google as their best acquisition ever. It is interesting to consider what mindset the Google leadership team adopted when they decided to acquire Android. The choice may have been predominately “description-based”, that is, rooted in hard numbers of estimated financial outcomes and their likelihoods. In contrast, the choice may have been predominately “experience-based”, that is, rooted in instinct sharpened by the practice of having acquired dozens of other companies. The question is more than academic in light of a growing body of evidence showing that choice differences occur between identical decisions depending on whether choicerelevant information is acquired from a description or garnered from experience
Posted on: Fri, 29 Aug 2014 05:23:57 +0000
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