Recent investigations of adolescents’ beliefs about risk have led to surprisingly optimistic conclusions: Teens’ self estimates of their likelihood of experiencing various life events not only correlate sensibly with relevant risk factors (Fischhoff et al., 2000), but they also significantly predict later experiencing the events (Bruine de Bruin et al., 2007). Using the same dataset examined in previous investigations, the present study extended these analyses by comparing the predictive value of self estimates of risk to that of traditional risk factors for each outcome. The analyses focused on the prediction of pregnancy, criminal arrest, and school enrollment. Three findings emerged. First, traditional risk factor information tended to out-predict self assessments of risk, even when the risk factors included crude, potentially unreliable measures (e.g., a simple tally of self-reported criminal history) and when the risk factors were aggregated in a nonoptimal way (i.e., unit weighting). Second, despite the previously reported correlations between self estimates and outcomes, perceived invulnerability was a problem among the youth: Over half of the teens who became pregnant, half of those who were not enrolled in school, and nearly a third of those who were arrested had, one year earlier, indicated a 0% chance of experiencing these outcomes. Finally, adding self estimates of risk to the other risk factor information produced only small gains in predictive accuracy. These analyses point to the need for greater education about the situations and behaviors that lead to negative outcomes.

Subjects donate individually (control group) or in pairs (treatment group). Those in pairs reveal their donation decision to each other. Average donations in the treatment group are significantly higher than in the control group. Paired subjects have the opportunity to revise their donation decision after discussion. Pair members shift toward each others’ initial decisions. Subjects are happier with their decision when their donations are larger, but those in pairs are less happy, controlling for amount donated. These findings suggest reluctant altruism due to peer pressure in charitable giving.

Decision makers often save money for a specific goal by forgoing discretionary consumption and instead putting the money toward the savings goal. We hypothesized that reference points can be exploited to enhance this type of saving. In two hypothetical scenario studies, subjects made judgments of their likelihood to forgo a small expenditure in order to put the money toward the savings goal. In Experiment 1, judgments were higher if the savings goal was presented as composed of weekly subgoals (e.g., save $60 per week to buy a $180 iPod). Experiment 2 replicated this finding and demonstrated that the subgoal manipulation increased judgments of likelihood to save money only when the money saved from the foregone consumption would allow the decision maker to meet the weekly subgoal exactly (not under or overshoot it). These results suggest a reference point mechanism and point to ways that behavioral decision research can be harnessed to improve economic behaviors.

We report a mathematical result that casts doubt on the possibility of recalibration of probabilities using calibration curves. We then discuss how to interpret this result in the light of behavioral research.

Physicians expect a treatment to be more effective when its clinical outcomes are described as relative rather than as absolute risk reductions. We examined whether effects of presentation method (relative vs. absolute risk reduction) remain when physicians are provided the baseline risk information, a vital piece of statistical information omitted in previous studies. Using a between-subjects design, ninety five physicians were presented the risk reduction associated with a fictitious treatment for hypertension either as an absolute risk reduction or as a relative risk reduction, with or without including baseline risk information. Physicians reported that the treatment would be more effective and that they would be more willing to prescribe it when its risk reduction was presented to them in relative rather than in absolute terms. The relative risk reduction was perceived as more effective than absolute risk reduction even when the baseline risk information was explicitly reported. We recommend that information about absolute risk reduction be made available to physicians in the reporting of clinical outcomes. Moreover, health professionals should be cognizant of the potential biasing effects of risk information presented in relative risk terms.

Previous research on the role of recognition in decision-making in inferential choice has focussed on the Recognition Heuristic (RH), which proposes that in situations where recognition is predictive of a decision criterion, recognized objects will be chosen over unrecognized ones, regardless of any other available relevant information. In the current study we examine the role of recognition in preferential choice, in which subjects had to choose one of a pair of consumer objects that were presented with quality ratings (positive, neutral, and negative). The results showed that subjects’ choices were largely based on recognition, as the famous brand was preferred even when additional star ratings rendered it as less attractive. However, the additional information did affect the proportion of chosen famous items, in particular in the cases when star ratings for the recognised brand were negative. This condition also resulted in longer response times compared to neutral and positive conditions. Thus, the current data do not point to a simple compensatory mechanism in preferential choice: although choice is affected by additional information, it seems that recognition is employed as an initial important first step in the decision-making process.

In this paper we test two hypotheses regarding magical thinking about the perceived likelihood of future events. The first is that people believe that those who “tempt fate” by failing to take necessary precautions are more likely to suffer negative outcomes. The second is the “protection effect”, where reminding people of precautions they have taken leads them to see related risks as less likely. To this end, we describe the results from three attempted direct replications of a protection effect experiment reported in Tykocinski (2008) and two replications of a tempting fate experiment reported in Risen and Gilovich (2008) in which we add a test of the protection effect. We did not replicate the protection effect but did replicate the tempting fate effect.

Birnbaum (2011, 2012) questioned the iid (independent and identically distributed) sampling assumptions used by state-of-the-art statistical tests in Regenwetter, Dana and Davis-Stober’s (2010, 2011) analysis of the “linear order model”. Birnbaum (2012) cited, but did not use, a test of iid by Smith and Batchelder (2008) with analytically known properties. Instead, he created two new test statistics with unknown sampling distributions.

Our rebuttal has five components: 1) We demonstrate that the Regenwetter et al. data pass Smith and Batchelder’s test of iid with flying colors. 2) We provide evidence from Monte Carlo simulations that Birnbaum’s (2012) proposed tests have unknown Type-I error rates, which depend on the actual choice probabilities and on how data are coded as well as on the null hypothesis of iid sampling. 3) Birnbaum analyzed only a third of Regenwetter et al.’s data. We show that his two new tests fail to replicate on the other two-thirds of the data, within participants. 4) Birnbaum selectively picked data of one respondent to suggest that choice probabilities may have changed partway into the experiment. Such nonstationarity could potentially cause a seemingly good fit to be a Type-II error. We show that the linear order model fits equally well if we allow for warm-up effects. 5) Using hypothetical data, Birnbaum (2012) claimed to show that “true-and-error” models for binary pattern probabilities overcome the alleged short-comings of Regenwetter et al.’s approach. We disprove this claim on the same data.

Prior studies have found that subjects prefer an improving sequence of income over a constant sequence, even if the constant sequence offers a larger present-discounted value. However, little is known about how these preferences vary with the size of the wage payments. In each of four studies, we find a positive relationship between the preference for increasing payments and the size of the payments. We find no evidence that our measure of the decreasing marginal utility of money is associated with this relationship. Additionally, we find weak evidence in support of a theoretical prediction that the difference between the preference for increasing wage payments and the preference for increasing nonwage payments will be largest for intermediate amounts. We do not find a relationship between the preference for increasing payments and the preference for improving nonmonetary sequences. Finally, the relationship between the preference for increasing payments and the size of the payments does not appear to be sensitive to the precise specification of the increases.