UCLA Laboratory Research Group
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belief and preference | decision under risk | partition dependence | traits and states
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Belief and Preference in Decision Under Uncertainty Lab members: Fox, Bardolet, Hadar Most decisions must be made without knowing in advance what their consequences will be. For instance, one must decide whether to go to court or settle a civil suit without knowing in advance whether the court will decide in one’s favor; one must decide whether or not to purchase insurance without knowing in advance whether or not there will be a need for a claim. In decisions under risk, probabilities of consequences are assumed to be known with precision (as is the case with chance gambles); in decisions under uncertainty they are not (as is this case with most other decisions). Our lab is investigating how to understand the impact of uncertainty in decision making. Specifically we have a number of projects aimed at understanding the interaction of (1) probabilistic beliefs, (2) risk preferences, and (3) uncertainty preferences/ambiguity attitudes in governing such choices. Current projects are focused on developing improved procedures for measuring subjective value and decision weights, testing a three-stage model of decision under uncertainty, and understanding the differences between description-based decision making versus experience-based decision making. Representative papers: Tversky & Fox (1995), Fox & Tversky (1995), Fox, Rogers & Tversky (1996), Fox (1999), Fox & Levav (2000), Fox & Birke (2002), Fox & Weber (2002), Sloman et al. (2004), Fox & Hadar (2006), Bearden, Fox & Wallsten (2007),
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Neurophysiology of Decision Under Risk Lab members: Fox, Hadar, Barkley-Levenson We are currently beginning studies aimed at better understanding the neuophysiology of decision making under risk. In collaboration with the Poldrack Lab we are using brain imaging techniques to explore the interaction of limbic and prefrontal structures in mediating choices characterized by prospect theory. In addition we are developing traditional laboratory and survey-based studies to further investigate the role of affect and motivation in decision under risk. Survey paper: Trepel, Fox & Poldrack (2005)
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Partition Dependence in Judgment and Choice When people distribute beliefs, resources, or choices over events, beneficiaries, or consumption options, they tend to be biased toward even allocation over the groups into which possibilities are organized. Thus, judgments and choices vary systematically with the way in which possibilities happen to be grouped, a phenomenon known as “partition dependence.” We have found experimental evidence of partition dependence in a variety of substantive domains. In judgment under uncertainty, judged probabilities tend to be biased toward 1/n for each of n events into which the state space is partitioned. In resource allocation decisions, people tend to be biased toward even distribution over the groups into which the set of investments or beneficiaries are partitioned. In consumer choice, people tend to seek variety over the salient categories into which the menu of consumption options is partitioned. In continuing research we are exploring manifestations of partition dependence in capital budgeting decisions and prediction markets. We are also testing the “ignorance prior” model of judgment under uncertainty (a refinement of support theory) and measuring its parameters. Representative papers: Fox & Rottenstreich (2003), Fox & Levav (2004), Fox & Clemen (2005), Fox, Ratner & Lieb (2005), See, Fox & Rottenstreich (2006), Langer & Fox (working paper), Bardolet, Fox & Lovallo (working paper), Sonnemann, Langer, Fox & Camerer (working paper). |
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Traits and States in Risk-Taking Behavior Lab members: Fox, Hadar, Barkley-Levenson, Heinberg Risk taking behavior can be studied at many levels. The first level entails an analysis of risk-taking tendencies that are common to most people (as in prospect theory and our work on the three-stage model) and the investigation of why people exhibit these tendencies (e.g., using brain imaging techniques as in our work on the neurophysiology of risk). The second level entails an analysis of individual differences in risk taking and factors that predict these differences (e.g., dispositional traits, differences in brain chemistry or genotype). The third level entails an analysis of transitory states that influence risk taking, such as moods and emotions, motivations, and cognitive associations. Our newest area of investigation explores individual differences by developing better measures of individual differences in risk taking, particularly within the framework of prospect theory, and examines the influence of cognitive and affective states in risk taking. |
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