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Probability Weighting and Cognitive Ability

Probability weighting is a major concept for accommodating systematic departures from expected utility theory. We examine the relation between probability weighting and cognitive ability with two experiments: one recruiting subjects with a large variation in cognitive ability and the other using the within-subject manipulation of time constraints in lottery choices and cognitive tests. We find a significant association between likelihood insensitivity—the cognitive component of probability weighting—and cognitive limitation such that subjects with a lower cognitive score or more interrupted cognition due to time pressure respond less discriminately to intermediate probabilities and more over-sensitively to extreme probabilities. Our findings shed light on the sources of anomalous choices against expected utility theory.

Ketersediaan

Informasi Detail

Judul Seri

MANAGEMENT SCIENCE; Vol.68 No.7 July 2022

No. Panggil

-

Penerbit

: .,

Deskripsi Fisik

p. 5201-5215

Bahasa

English

ISBN/ISSN

-

Klasifikasi

NONE

Tipe Isi

-

Tipe Media

-

Tipe Pembawa

-

Edisi

-

Subjek

TIME PRESSURE
PROBABILITY WEIGHTING
COGNITIVE ABILITY
LIKELIHOOD INSENSITIVITY

Info Detail Spesifik

https://doi.org/10.1287/mnsc.2021.4146

Pernyataan Tanggungjawab

Syngjoo Choi, Jeongbin Kim, Eungik Lee, Jungmin Lee

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