The gambler’s fallacy (Tune, 1964) refers to the belief that a streak is more likely to end than chance would dictate. In three studies, participants exhibited a retrospective gambler’s fallacy (RGF) in which an event that seems rare appears to come from a longer sequence than an event that seems more common. Study 1 demonstrates this bias for streaks, while Study 2 does so with single rare events and shows that the appearance of rarity is more important than actual rarity. Study 3 extends these findings from abstract gambling domains into real world domains to demonstrate the generalizability of the effects. The RGF follows from the law of small numbers (Tversky & Kahneman, 1971) and has many applications, from perceptions of the social world to philosophical debates about the existence of multiple universes.

In recent years, numerous studies comparing intuition and deliberation have been published. However, relatively little is known about the cognitive processes underlying the two decision modes. In two studies, we analyzed the effects of decision mode instructions on processes of information search and integration, using eye-tracking technology in a between-participants (Study 1) and a within-participants (Study 2) design. Our findings indicate that the instruction to deliberate does not necessarily lead to qualitatively different information processing compared to the instruction to decide intuitively. We found no difference in mean fixation duration and the distribution of short, medium and long fixations. Short fixations in particular prevailed under both decision mode instructions, while long fixations indicating a conscious and calculation-based information processing were rarely observed. Instruction-induced deliberation led to a higher number of fixations, a more complete information search and more repeated information inspections. We interpret our findings as support for the hypothesis that intuitive and deliberate decision modes share the same basic processes which are supplemented by additional operations in the deliberate decision mode.

The current study is based on a field study of the 2006 Israel-Lebanon war that was conducted in two waves, the first two weeks after the end of the war, and the second 18 months later (2008). The purpose of the study was to examine recalled emotions and perceived risks induced by manipulation using a short videoclip that recalled the sounds of the alarms and the sights of the missile attacks during the war. Before filling in the study questionnaire in 2008, the experimental group watched a short videoclip recalling the events of the war. The control group did not watch the video before filling in the questionnaire. Using the data provided by questionnaires, we analyzed the effect of recalled emotions on perceived risks in two different regions in Israel: the northern region, which was under missile attack daily during the war, and the central region, which was not under missile attacks. The videoclip had a strong effect on the level of recalled emotions in both regions, but it did not affect risk judgments. The results of the analytical framework in the northern region support both the valence approach, in which negative emotion increases pessimism about risk (Johnson & Tversky, 1983), and the modified appraisal tendency theory, which implies different effects for different emotions (Lerner & Keltner, 2000). The current study emphasizes the effects of recalled emotion in the context of the 2006 Israel-Lebanon war on perceived risks among those in the northern region who were under direct attack compared to those who were not directly exposed to the war. Understanding people’s responses to stressful events is crucial, not only when these events take place but also over time, since media-induced emotions can influence appraisals and decisions regarding public policies.

This paper compares the behavior of individuals playing a classic two-person deterministic prisoner’s dilemma (PD) game with choice data obtained from repeated interdependent security prisoner’s dilemma games with varying probabilities of loss and the ability to learn (or not learn) about the actions of one’s counterpart, an area of recent interest in experimental economics. This novel data set, from a series of controlled laboratory experiments, is analyzed using Bayesian hierarchical methods, the first application of such methods in this research domain.

We find that individuals are much more likely to be cooperative when payoffs are deterministic than when the outcomes are probabilistic. A key factor explaining this difference is that subjects in a stochastic PD game respond not just to what their counterparts did but also to whether or not they suffered a loss. These findings are interpreted in the context of behavioral theories of commitment, altruism and reciprocity. The work provides a linkage between Bayesian statistics, experimental economics, and consumer psychology.

This paper uses proprietary data from a blackjack table in Las Vegas to analyze how the expectation of regret affects peoples’ decisions during gambles. Even among a group of people who choose to participate in a risk-taking activity, we find strong evidence of an economically significant omission bias: 80% of the mistakes at the table are caused by playing too conservatively, resulting in substantial monetary losses. This behavior is equally prevalent among large-stakes gamblers and does not change in the face of more complicated strategic decisions.

Participants decided whom of two patients to prioritize for surgery in three studies. The factual quantitative information about the patients (e.g., probability of surviving surgery) was given in vignette form with case descriptions on Visual Analogue Scales — VAS’s. Differentiation and Consolidation theory predicts that not only the attractiveness of facts but also the mental representations of objective facts themselves will be restructured in post-decision processes in support of a decision (Svenson, 2003). After the decision, participants were asked to reproduce the objective facts about the patients. The results showed that distortions of objective facts were used to consolidate a prior decision. The consolidation process relied on facts initially favoring the non-chosen alternative and on facts rated as less, rather than more important.

Physicians often encounter diagnostic problems with ambiguous and conflicting features. What are they likely to do in such situations? We presented a diagnostic scenario to 84 family physicians and traced their information gathering, diagnoses and management. The scenario contained an ambiguous feature, while the other features supported either a cardiac or a musculoskeletal diagnosis. Due to the risk of death, the cardiac diagnosis should be considered and managed appropriately. Forty-seven participants (56%) gave only a musculoskeletal diagnosis and 45 of them managed the patient inappropriately (sent him home with painkillers). They elicited less information and spent less time on the scenario than those who diagnosed a cardiac cause. No feedback was provided to participants. Stimulated recall with 52 of the physicians revealed differences in the way that the same information was interpreted as a function of the final diagnosis. The musculoskeletal group denigrated important cues, making them coherent with their representation of a pulled muscle, whilst the cardiac group saw them as evidence for a cardiac problem. Most physicians indicated that they were fairly or very certain about their diagnosis. The observed behaviours can be described as coherence-based reasoning, whereby an emerging judgment influences the evaluation of incoming information, so that confident judgments can be achieved even with ambiguous, uncertain and conflicting information. The role of coherence-based reasoning in medical diagnosis and diagnostic error needs to be systematically examined.

Researchers typically use incentives (such as money or course credit) in order to obtain participants who engage in the specific behaviors of interest to the researcher. There is, however, little understanding or agreement on the effects of different types and levels of incentives used. Some results in the domain of statistical reasoning suggest that performance differences — previously deemed theoretically important — may actually be due to differences in incentive types across studies. 704 participants completed one of five variants of a statistical reasoning task, for which they received either course credit, flat fee payment, or performance-based payment incentives. Successful task completion was more frequent with performance-based incentives than with either of the other incentive types. Performance on moderately difficult tasks (compared to very easy and very hard tasks) was most sensitive to incentives. These results can help resolve existing debates about inconsistent findings, guide more accurate comparisons across studies, and be applied beyond research settings.

Experiments have suggested that decisions from experience differ from decisions from description. In experience-based decisions, the decision makers often fail to maximise their payoffs. Previous authors have ascribed the effect of underweighting of rare outcomes to this deviation from maximisation. In this paper, I re-examine and provide further analysis on the effect with an experiment that involves a series of simple binary choice gambles. In the current experiment, decisions that bear small consequences are repeated hundreds of times, feedback on the consequence of each decision is provided immediately, and decision outcomes are accumulated. The participants have to learn about the outcome distributions through sampling, as they are not explicitly provided with prior information on the payoff structure. The current results suggest that the “hot stove effect” is stronger than suggested by previous research and is as important as the payoff variability effect and the effect of underweighting of rare outcomes in analysing decisions from experience in which the features of gambles must be learned through a sampling process.