Timothy Pleskac, Max Planck Institute for Human Development
Abstract: In some situations, when information is limited and people have to make a decision, all that they have to rely on is their experience with the options. A large body of empirical work has established that decisions made from experience are systematically different from the decisions people would make between the same options but with definite knowledge of their possible outcomes and their likelihoods, a description–experience gap. In particular, during decisions from description people tend to overweight rare events while in decisions from experience they tend to underweight them. Ironically enough extant models of decisions from experience have tried to explain this gap by focusing primarily on the choice process, taking what was learned from experience and how as a given. In this talk, I take a different approach and model decisions from experience as a sequential sampling process, capturing the interdependence between how people learn from experience and how they make a choice. I will then use this model to show how by capturing this interdependence we gain a better understanding of the preferences people have; how they explore their options to generate their experience; and how, why, and when, they will appear to underweight rare events. More generally, I will show that the model offers a mechanistic understanding of how the active role people take in generating their experience from their choice environment shapes the decisions they make from experience.