342 participants made decisions between a larger payout but riskier gamble and a smaller payout but less risky gamble on three response modes: a choice, a rejection and an exchange mode. When the probability ratio between the gambles was large, they preferred the larger payout but riskier gamble more, as amounts of the payout decreased. Their preference for the larger payout but riskier gamble on the rejection mode was weaker than that on the choice mode. On the other hand, there was no difference in extent of the preference between the exchange mode and the choice mode. The results support the hypothesis that preference for a risky option depends on negative emotion.
References
1.
BellD. E. (1985) Disappointment in decision making under uncertainty. Operations Research, 33, 1–27.
2.
ChapmanG. B.WeberB. (2006) Decision biases in intertemporal choice and choice under uncertainty: testing a common account. Memory & Cognition, 34(3), 589–602.
3.
ChapmanG. B.WinquistJ. R. (1998) The magnitude effect: temporal discount rates and restaurant tips. Psychological Bulletin & Review, 5(1), 119–123.
4.
ChengP.ChiouW. (2010) Rejection or selection: influence of framing in investment decisions. Psychological Reports, 106(1), 247–254.
GoddenD.BaddeleyA. D. (1975) Context-dependent memory in two natural environments: on land and under water. British Journal of Psychology, 66, 325–331.
7.
GraceR.McLeanA. P. (2005) Integrated versus segregated accounting and the magnitude effect in temporal discounting. Psychological Bulletin & Review, 12(4), 732–739.
8.
GreenL.MyersonJ.McFaddenE. (1997) Rate of discounting decreases with amount of reward. Memory & Cognition, 25, 715–723.
9.
HaisleyE.MostafaR.LoewensteinG. (2008) Myopic risk-seeking: the impact of narrow decision bracketing on lottery play. Journal of Risk and Uncertainty, 37, 57–75.
10.
JonesS.OaksfordM. (2011) Transactional problem content in cost discounting: parallel effects for probability and delay. Journal of Experimental Psychology: Learning, Memory, and Cognition, 37(3), 739–747.
11.
KahnemanD.KnetchJ. L.ThalerR. H. (1991) Anomalies: the endowment effect, loss aversion, and status quo bias. The Journal of Economic Perspective, 5(1), 193–206.
12.
KahnemanD.TverskyA. (1979) Prospect theory: an analysis of decision under risk. Econometrica, 47, 263–291.
13.
KahnemanD.TverskyA. (1984) Choices, values, and frames. American Psychologist, 39, 341–350.
14.
KirbyK. N. (1997) Bidding on the future: evidence against normative discounting of delayed rewards. Journal of Experimental Psychology: General, 126, 54–70.
15.
KivetzR.SimonsonI. (2002) Earning the right to indulge: effort as determinant of customer preferences toward frequency program rewards. Journal of Marketing Research, 39(2), 155–170.
16.
KwongJ. Y. Y.SomanD.HoC. K. Y. (2011) The role of computational ease on the decision to spend loyalty program points. Journal of Consumer Psychology, 21, 146–156.
17.
LoomesG.SugdenR. (1986) Disappointment and dynamic consistency in choice under uncertainty. Review of Economic Studies, 53, 271–282.
18.
McKercharT. L.RendaC. R. (2012) Delay and probability discounting in humans: an overview. The Psychological Record, 62, 817–834.
19.
MellersB.SchwartzA.HoK.RitovL. (1997) Decision affect theory: emotional responses to the outcomes of risk gambles. Psychological Science, 8(8), 423–428.
20.
MellersB.SchwartzA.RitovL. (1999) Emotion-based choice. Journal of Experimental Psychology: General, 128(3), 332–345.
21.
MeloyM. G.RussoE. (2004) Binary choice under instructions to select versus to reject. Organizational Behavior and Human Decision Making, 93, 114–128.
22.
PrelecD.LoewensteinG. (1991) Decision making over time and under uncertainty: a common approach. Management Science, 93, 770–786.
23.
RachlinH. (2000) The science of self-control. Cambridge, MA: Harvard Univer. Press.
24.
RachlinH.LogueA. W.GibbonJ.FrankelM. (1986) Cognition and behavior in studies of choice. Psychological Review, 93(1), 33–45.
25.
RocaM.MauleA. J. (2009) The effect of endowment on the demand for probabilistic information. Organizational Behavior and Human Decision Processes, 109, 56–66.
26.
RyanT. A. (1960) Significance tests for multiple comparison of proportions, variances, and other statistics. Psychological Bulletin, 57(4), 318–328.
27.
ShafirE. (1993) Choosing versus rejecting: why some options are both better and worse than others. Memory & Cognition, 21(4), 546–556.
28.
TverskyA.KahnemanD. (1992) Advances in prospect theory: cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5, 297–323.
29.
TulvingE. (1983) Elements of episodic memory. New York: Oxford Univer. Press.
30.
UnclesM.DowlingG. R.HammondK. (2003) Customer loyalty and customer loyalty programs. Journal of Consumer Marketing, 20(4), 294–316.
31.
WeberB. J.ChapmanG. B. (2005) Playing for peanuts: why is risk seeking more common for low-stakes gambles?Organizational Behavior and Human Decision Processes, 97, 31–46.
32.
WeberE. U.JohnsonE. J. (2006) Constructing preferences from memories. In LichtensteinS.SlovicP. (Eds.), The construction of preference. New York: Cambridge Univer. Press. Pp. 397–410.
33.
van DijkW. W.van der PligtJ. (1997) The impact of probability and magnitude of outcome on disappointment and elation. Organizational Behavior and Human Decision Processes, 69(3), 277–284.
