Whether And How The Presence Of Description Moderates Memory Biases In Decision-making - Info and Reading Options

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Risky choices fill our lives, ranging from trivial choices - like buying a lottery ticket or whether to take an umbrella before going out - to significant life turning points - like career planning or marriage. Individuals learn about risk (outcomes and associated probabilities) mainly via two ways: description, which provides explicit outcomes and associated probabilities of available choice options; and experience, which refers to individuals interacting with the choice options and receiving feedback from their choices. Description and experience shape choice behavior differently, which has been referred to as the description-experience (D-E) gap (Hertwig & Erev, 2009). For example, people overweight rare events when making description-based choices (Kahneman & Tversky, 1979), while they underweight rare events when learning and making choices from experience (Barron & Erev, 2003; Hertwig et al., 2004; Ungemach et al., 2009). Previous studies (Barron & Erev, 2003; Hertwig et al., 2004; Ludvig et al., 2014) explored description and experience as two separate and contrary types of information, focusing on what causes the D-E gap. However, in real life, people may use descriptions and their experience simultaneously. For example, drivers may rely on instructions received from their instructor and personal driving experience when weather is extremely adverse. Recent studies have investigated how the concurrent availability of description and experience affects choice behavior (Lejarraga et al., 2016; Newell & Rakow, 2007; Yechiam et al., 2005). In an early study combining description and experience, choice behavior was similar to that when only experience was available, suggesting that description is heavily discounted and has little impact on behavior (Lejarraga & Gonzalez, 2011). This tendency to discount descriptive information can be mitigated when the decision context is more complex (Weiss-Cohen et al., 2018), and when individuals have little experience with the task (Weiss-Cohen et al., 2021). This study aims to investigate whether and how providing descriptions of the choice options at the same time as learning from experience will influence memory-related effects usually observed in experience-based risky choice. In description-based choice, people demonstrate the reflection effect, that is, they show more risk aversion in the gains domain than in the losses domain (Kahneman & Tversky, 1979); on the other hand, individuals show more risk seeking in gains than losses when they make experience-based choices, showing a reversed-reflection effect (Ludvig & Spetch, 2011). Such a reversal of risk preference in experience-based choice has been attributed to the salience of extreme outcomes (and their impact on memory) within decision contexts. Previous studies have suggested that individuals tend to recall extreme outcomes of their decisions more frequently, which in turn shapes their behavior (Madan et al., 2014; Ludvig et al., 2014). However, it remains unclear whether this memory bias, where people remember extreme outcomes more frequently, remains even when people have access to descriptive summaries of the available options. We will investigate whether the reversed-reflection effect persists when participants have access to descriptions in addition to their experience. Additionally, we will use memory tests to determine whether the salience of extreme outcomes could explain the reversed-reflection effect.

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