TY - JOUR
T1 - A theory of perceived risk and attractiveness
AU - Weber, Elke U.
AU - Anderson, Carolyn J.
AU - Birnbaum, Michael H.
N1 - Funding Information:
This work was supported by National Science Foundation Grant SES 86-06750 and a James S. Kemper Foundation Research grant to the first author, by a predoctoral traineeship by the Quantitative Methods Program of the Department of Psychology, University of Illinois at Urbana-Champaign (funded by ADAHMA, National Research Service Award MH14257) to the second author, and facilitated by National Science Foundation Grant SES 89-21880 to the third author. We thank Jerry Busemeyer, Linda Hynan, Robin Keller, Rakesh Satin, and Paul Schoemaker for useful comments on an earlier version of the manuscript. Requests for reprints should be addressed to Elke U. Weber, Center for Decision Research, Graduate School of Business, University of Chicago, 1101 East 58th Street, Chicago, IL 60637.
PY - 1992/8
Y1 - 1992/8
N2 - People judged both the attractiveness and risk of lotteries to win or lose money. The lotteries were designed to test whether risk and attractiveness judgments show systematic deviations from the simple sum of probability-by-utility-products analogous to (S)EU theory. Our results led to an alternative combination rule for probability and outcome information, with a relative weight averaging component and a configural (i.e., sign- or rank-dependent) probability weighting component. Ratings of risk and attractiveness were negatively correlated, but the two tasks showed systematic differences in the rank order of judgments. Both judgments could be fit by the same configural relative weight averaging model, but with different parameters (especially the sign-dependent probability weighting functions). Risk judgments were more sensitive to the probability of losses and zero outcomes compared to attractiveness judgments, which were more sensitive to the probability of gains. There were individual differences on the extent of this difference in probability weights between risk and attractiveness judgments.
AB - People judged both the attractiveness and risk of lotteries to win or lose money. The lotteries were designed to test whether risk and attractiveness judgments show systematic deviations from the simple sum of probability-by-utility-products analogous to (S)EU theory. Our results led to an alternative combination rule for probability and outcome information, with a relative weight averaging component and a configural (i.e., sign- or rank-dependent) probability weighting component. Ratings of risk and attractiveness were negatively correlated, but the two tasks showed systematic differences in the rank order of judgments. Both judgments could be fit by the same configural relative weight averaging model, but with different parameters (especially the sign-dependent probability weighting functions). Risk judgments were more sensitive to the probability of losses and zero outcomes compared to attractiveness judgments, which were more sensitive to the probability of gains. There were individual differences on the extent of this difference in probability weights between risk and attractiveness judgments.
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U2 - 10.1016/0749-5978(92)90030-B
DO - 10.1016/0749-5978(92)90030-B
M3 - Article
AN - SCOPUS:38249009867
SN - 0749-5978
VL - 52
SP - 492
EP - 523
JO - Organizational Behavior and Human Decision Processes
JF - Organizational Behavior and Human Decision Processes
IS - 3
ER -