Prospect theory (Kahneman & Tversky, 1979, 1984) suggests that when people are presented with objective probabilities they (a) underweight high probabilities (e.g., behave as if 99% likelihood of an event is lower than 99%), (b) overweight low probabilities, and (c) are relatively insensitive to differences among moderate probabilities. We hypothesized that these biases will be found under prevention focus (Higgins, 1997), which can be triggered by security needs, and monetary considerations; but reversed under promotion focus (Higgins, 1997), which can be triggered by self-actualization needs. To test the hypothesis, we developed a cross-modality matching task that allows tapping probability transformations independently from the value of an event. In two studies, participants (N=116 and N=156) drew portions of circles that represented their transformations of 13 different stated probabilities regarding three scenarios (either promotion or prevention). Results in the prevention condition were consistent with prospect theory-providing validity for the cross-modality matching method. Results in the promotion condition indicated both a general elevation (overweighting), which was most evident for moderate and moderate-high probabilities, and minor underweighting for probabilities larger than. 80. In the second study, we also assessed chronic-regulatory focus which yielded effects similar to the manipulated-regulatory focus. In both studies, some individuals in the promotion focus groups yielded probability weighting functions with a curvature opposite the predictions of prospect theory; and within each experimental condition there were additional significant differences in the transformation yielded by the putatively similar three scenarios. The results indicate that our cross-modality matching method is very sensitive to context effects and hint at the possibility of applying similar cross-modality matching methods to explore other decision-making processes such as value functions (Kahneman & Tversky, 1979).
|Original language||American English|
|Number of pages||20|
|Journal||Organizational Behavior and Human Decision Processes|
|State||Published - Sep 2004|
Bibliographical noteFunding Information:
The authors thank Amnon Rapoport for encouragement to start this project and Amnon Rapoport and Yuval Rottenstreich for comments on an earlier draft of this paper. This research was supported by a grant from the Reccanti Fund at the School of Business Administration and an ARI contract # DASW01-04-K-0001 to the first author. The view, opinions, and/or findings contained in this paper are those of the authors and should not be construed as an official Department of the Army position, policy, or decision. An earlier version of this paper was presented at the Israeli Conference on Cognitive Psychology and on Judgment and Decision Making at the Hebrew University, Jerusalem, July 2002.