We examine two departures of individual perceptions of randomness fromprobability theory: the hot hand and the gambler's fallacy, and theirrespective opposites. This paper's first contribution is to use data fromthe field (individuals playing roulette in a casino) to demonstrate theexistence and impact of these biases that have been previously documented in thelab. Decisions in the field are consistent with biased beliefs, although weobserve significant individual heterogeneity in the population. A secondcontribution is to separately identify these biases within a given individual,then to examine their within-person correlation. We find a positive andsignificant correlation across individuals between hot hand and gambler'sfallacy biases, suggesting a common (root) cause of the two related errors. Wespeculate as to the source of this correlation (locus of control), and suggestfuture research which could test this speculation.

In a series of recent experiments (Davis, Millner and Reilly, 2005, Eckel andGrossman, 2003, 2005a-c, 2006), matching subsidies generate significantly highercharity receipts than do theoretically equivalent rebate subsidies. This paperreports a laboratory experiment conducted to examine whether the higher receiptsare attributable to a relative preference for matching subsidies or to an“isolation effect” (McCaffery and Baron, 2003, 2006). Somepotential policy implications of isolation effects on charitable contributionsare also considered.

The principle of loss aversion is thought to explain a wide range of anomalousphenomena involving tradeoffs between losses and gains. In this article, I showthat the anomalies loss aversion was introduced to explain - the risky betpremium, the endowment effect, and the status-quo bias - are characterized notonly by a loss/gain tradeoff, but by a tradeoff between the status-quo andchange; and, that a propensity towards the status-quo in the latter tradeoff issufficient to explain these phenomena. Moreover, I show that two basicpsychological principles - (1) that motives drive behavior; and (2) thatpreferences tend to be fuzzy and ill-defined - imply the existence of a robustand fundamental propensity of this sort. Thus, a loss aversion principle isrendered superfluous to an account of the phenomena it was introduced toexplain.

This paper proposes a revised version of the original Domain-Specific Risk-Taking(DOSPERT) scale developed by Weber, Blais, and Betz (2002) that is shorter andapplicable to a {broader range of ages, cultures, and educational levels}. Italso provides a French translation of the revised scale. Using multilevelmodeling, we investigated the risk-return relationship between apparent risktaking and risk perception in 5 risk domains. The results replicate previouslynoted differences in reported degree of risk taking and risk perception at themean level of analysis. The multilevel modeling shows, more interestingly, thatwithin-participants variation in risk taking across the 5 content domains of thescale was about 7 times as large as between-participants variation. We discussthe implications of our findings in terms of the person-situation debate relatedto risk attitude as a stable trait.

Across many real-world domains, men engage in more risky behaviors than do women.To examine some of the beliefs and preferences that underlie this difference,657 participants assessed their likelihood of engaging in various riskyactivities relating to four different domains (gambling, health, recreation, andsocial), and reported their perceptions of (1) probability of negative outcomes,(2) severity of potential negative outcomes, and (3) enjoyment expected from therisky activities. Women’s greater perceived likelihood of negativeoutcomes and lesser expectation of enjoyment partially mediated their lowerpropensity toward risky choices in gambling, recreation, and health domains.Perceptions of severity of potential outcomes was a partial mediator in thegambling and health domains. The genders did not differ in their propensitytowards taking social risks. A fifth domain of activities associated with highpotential payoffs and fixed minor costs was also assessed. In contrast to otherdomains, women reported being more likely to engage in behaviors in this domain.This gender difference was partially mediated by women’s more optimisticjudgments of the probability of good outcomes and of outcomes being moreintensely positive.

Imagine that you have just received a colon cancer diagnosis and need to choosebetween two different surgical treatments. One surgery, the "complicatedsurgery," has a lower mortality rate (16% vs. 20%) but compared to the othersurgery, the "uncomplicated surgery," also carries an additional 1% risk of eachof four serious complications: colostomy, chronic diarrhea, wound infection, oran intermittent bowel obstruction. The complicated surgery dominates theuncomplicated surgery as long as life with complications is preferred overdeath.

In our first survey, 51% of a sample (recruited from the cafeteria of auniversity medical center) selected the dominated alternative, the uncomplicatedsurgery, justifying this choice by saying that the death risks for the twosurgeries were essentially the same and that the uncomplicated surgery avoidedthe risk of complications. In follow-up surveys, preference for theuncomplicated surgery remained relatively consistent (39%-51%) despite (a)presenting the risks in frequencies rather than percents, (b) grouping the 4complications into a single category, or (c) giving the uncomplicated surgery asmall chance of complications as well. Even when a pre-decision "focusingexercise" required people to state directly their preferences between life witheach complication versus death, 49% still chose the uncomplicated surgery.

People’s fear of complications leads them to ignore important differencesbetween treatments. This tendency appears remarkably resistant to debiasingapproaches and likely leads patients to make healthcare decisions that areinconsistent with their own preferences.

One of the largest reasons decision-makers make bad decisions (act imprudently)is that the world is full of uncertainty, we feel uncertain about theconsequences of our actions. Participants played a repeated game in whichdecisions were made under various types of uncertainty (either no uncertainty,uncertainty about the present consequences of behaviors, uncertainty about thefuture consequences of behavior, or both types of uncertainty). The gamerequired prudent decision making for success. While playing the game one ofthree types of feedback was placed between trials, either no feedback,behavioral feedback, or behavioral plus outcome feedback. Prudentdecision-making decreased when both types of uncertainty were added. Further,the addition of feedback increased prudent decision-making when futureuncertainty was present. The increase in prudent decisions appears to be fromfeedback’s ability to allow us to create probabilities associated withbehaviors and their consequences, implying that anything that reduces theuncertainty people feel in a world full of uncertainty will increase theirability to make prudent decisions.

This paper extends previous research showing that experienced difficulty ofrecall can influence evaluative judgments (e.g., Winkielman & Schwarz,2001) to a field study of university students rating a course. Studentscompleted a mid-course evaluation form in which they were asked to list either 2ways in which the course could be improved (a relatively easy task) or 10 waysin which the course could be improved (a relatively difficult task). Respondentswho had been asked for 10 critical comments subsequently rated the course morefavorably than respondents who had been asked for 2 critical comments. Aninternal analysis suggests that the number of critiques solicited provides aframe against which accessibility of instances is evaluated. The paper concludeswith a discussion of implications of the present results and possible directionsfor future research.