When (and why) absolute decision attribute values influence human preferences

Abstract

Relative rank models of risky decision-making suggest that human preferences are informed by sampled (and not absolute) values and their relative ranks. According to this proposal, an attribute's absolute value (e.g., money or probability), retrieved from memory or/and available in the context, has a relative rank within the sampled attribute values. Moreover, decision-makers use the relative ranks of sampled absolute values when they choose or evaluate an option. In contrast, we present evidence from studies with more than 1100 UK adults, that human preferences are indeed informed by an attribute's absolute value. In particular, when making a choice between two economic gambles (a safe gamble or a risky gamble), we found that the likelihood of choosing the risky gamble increased when it was with a desirable monetary prize (a larger amount of money – £150), regardless of the distribution and relative ranks of sampled monetary values. However, when both the safe and risky gambles were with non-desirable monetary prizes (£0.50 or £1.50), participants' preferences were influenced by the distribution and relative ranks of sampled monetary values. Accordingly, we propose that decision-making desirability triggers participants' willingness to use absolute values in their choice; the switch between participants making relative and absolute judgment is predicted by Edwards et al. (2012).