The effects of control on decision making from a prospect theory framework
Young, Diana L.
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Most decision making research investigates risk taking behavior involving the outcome of random events; however, most everyday decisions involve some amount of personal control (e.g. skill or knowledge) in the outcome of events. Two experiments investigated differences in decision making behavior between two distinct types of wagers: wagering on the outcome of random events and wagering on the outcome of events that are characterized by control. Experiment 1 offered participants bets based on the correctness of their answers to general knowledge questions, and Experiment 2 offered participants bets based on their ability to successfully putt a golf ball. Responses for these wagers were modeled in a prospect theory framework to posit psychological mechanisms behind decision making behavior. Both experiments found that participants betting on tasks characterized by control weighted probabilities more prescriptively than participants betting on chance events. Implications for applied and natural decisions are discussed, and plans for future research are hypothesized.