Risk defusing in decision making: prevention or intervention?

Abstract

In choices between gambles, utilities and probabilities of consequences determine the decision. If in quasi-realistic risky tasks, decision makers can actively search for information, few search for probability information, and many search for risk-defusing operators (RDOs). RDOs are actions intended by the decision maker to be performed additionally to a specific alternative, with the intention to decrease the risk. For the presented experiment the distinction of two types of RDOs is relevant: A Prevention RDO prevents the occurrence of a negative event that causes a negative outcome. An Intervention RDO does not prevent the negative event but interrupts the causal mechanism between negative event and negative outcome. Forty Eight subjects made decisions in three quasi-realistic task. In two of three tasks, this preference can be attributed to the casual structure of RDO.