Learning or Framing?: Effects of Outcome Feedback on Repeated Decisions from Description

Yu-Jia ChenPalm Beach Atlantic University
James CorterTeachers College, Columbia University

Abstract

Two experiments document effects of experienced outcome feedback on risk behavior in a repeated description-based decision task. In Study 1, participants were initially strongly risk-seeking in the loss domain, but became less so across 100 repeated trials with outcome feedback. No significant trend was observed for gain problems. Participants then experienced an additional 100 trials of the reflected gain or loss problem. Trends in risk preferences across these Set 2 trials were similar to those in Set 1, however, initial Set 2 levels of risky-option choices were shifted towards EV-maximization, suggesting a cross-domain effect of prior experience. Study 2 attempted to distinguish between reinforcement-learning and monetary reference-point explanations of these cross-domain effects by “endowing” participants facing 100 gain (loss) trials with a large starting loss (gain). Endowment with a large prior gain mimicked the effects of 100 prior gain trials for loss-domain decisions, favoring the reference-point account.

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Learning or Framing?: Effects of Outcome Feedback on Repeated Decisions from Description (152 KB)



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