Conference Presentation at the 2019 Annual Meeting of the Psychonomics Society
Prospect Theory (PT) predicts a “Fourfold Pattern of Risk Attitudes:” risk seeking for low-probability losses/high-probability gains, and risk aversion for high-probability losses/low-probability gains. Previously, subjects primarily exhibited this pattern for willingness-to-accept tasks. Per Fuzzy Trace Theory (FTT), subjects make binary choices using “some” vs. “none” gists, relying on verbatim representations only when necessary. FTT expects risk-aversion for gains and risk-seeking for losses for non-negligible probabilities, that truncating complements removing categorical contrasts attenuates this pattern, and that reliance on verbatim representations varies with metacognition. We tested these hypotheses by administering binary risky choices online, manipulating framing (gain vs. loss) and probability (low vs. high), holding gamble rewards constant. Gists were measured as “some” or “none”. We found risk-aversion for gains and risk-seeking for losses regardless of probability. Effect sizes varied as expected with individual differences, gists, and truncation. Contrary to PT, the fourfold pattern seems limited to verbatim comparisons.