Beyond what you see: How expectations and experience shape information search, preferences, and judgments

When people make decisions under uncertainty, they can relate to their expectations about and experience with the choice options. In decisions from experience, where people actively search for information, they typically rely on a few observations. I approached the question of why people feel confident to rely on only a few observations by investigating what influences information search, preferences, and judgments. In Manuscript 1, we investigated how people’s valuations of gambles change with growing experience. In two experiments, people observed different numbers of outcomes (sample sizes) of unknown gambles and then indicated for how much money they would sell each gamble. We contrasted a Bayesian model that predicts that with growing sample size selling prices change with a model that predicts that selling prices are stable across different sample sizes. People differed in how they treated sample size: Roughly half of the people integrated sample size as predicted by a Bayesian model and half did not. This finding was replicated in the study reported in Manuscript 2, in which people chose between two hotels based on summaries of customer ratings. We found that people’s ability to deal with statistical information correlated with how well a Bayesian model described their data. In Manuscripts 3 and 4, we studied how people’s expectations influence judgments and information search. In real life, larger rewards typically occur with lower probabilities than smaller rewards. In two experiments reported in Manuscript 3, people judged how likely they thought they were to win different monetary amounts in psychological studies. Following the environmental regularity, people made higher estimates for smallernthan for larger rewards. In a third experiment where people made probability judgments from experience, they searched less when this expectation about a negative probability–reward correlation was met. In Manuscript 4, we demonstrated that also in situations involving real-life decisions, people expect structural regularities. People judged how many participants they expect to experience side effects in clinical trials with different incentives. Whenincentives were larger, people expected more people to experience side effects than when incentives were smaller. In sum, in this dissertation, I showed that people differ in how they integrate sample–size based uncertainty and that both experiences made in the laboratory and expectations gained outside the laboratory influence information search and judgments.