Frequent winners explain apparent skewness preferences in experience-based decisions.

ABSTRACT: Do people's attitudes toward the (a)symmetry of an outcome distribution affect their choices? Financial investors seek return distributions with frequent small returns but few large ones, consistent with leading models of choice in economics and finance that assume right-skewed preferences. In contrast, many experiments in which decision-makers learn about choice options through experience find the opposite choice tendency, in favor of left-skewed options. To reconcile these seemingly contradicting findings, the present work investigates the effect of skewness on choices in experience-based decisions. Across seven studies, we show that apparent preferences for left-skewed outcome distributions are a consequence of those distributions having a higher value in most direct outcome comparisons

SUBMITTER: Olschewski S 

PROVIDER: S-EPMC10962955 | biostudies-literature | 2024 Mar

REPOSITORIES: biostudies-literature