Most people are caring and will exert great effort to rescue individual victims whose needy plight comes to their attention. These same good people, however, often become numbly indifferent to the plight of individuals who are “one of many” in a much greater problem. Why does this occur? The answer to this question will help us answer a related question that is the topic of this paper: Why, over the past century, have good people repeatedly ignored mass murder and genocide? Every episode of mass murder is unique and raises unique obstacles to intervention. But the repetitiveness of such atrocities, ignored by powerful people and nations, and by the general public, calls for explanations that may reflect some fundamental deficiency in our humanity — a deficiency that, once identified, might possibly be overcome. One fundamental mechanism that may play a role in many, if not all, episodes of mass-murder neglect involves the capacity to experience affect, the positive and negative feelings that combine with reasoned analysis to guide our judgments, decisions, and actions. I shall draw from psychological research to show how the statistics of mass murder or genocide, no matter how large the numbers, fail to convey the true meaning of such atrocities. The reported numbers of deaths represent dry statistics, “human beings with the tears dried off,” that fail to spark emotion or feeling and thus fail to motivate action. Recognizing that we cannot rely only upon our moral feelings to motivate proper action against genocide, we must look to moral argument and international law. The 1948 Genocide Convention was supposed to meet this need, but it has not been effective. It is time to examine this failure in light of the psychological deficiencies described here and design legal and institutional mechanisms that will enforce proper response to genocide and other forms of mass murder.

Most American respondents give “irrational,” magical responses in a variety of situations that exemplify the sympathetic magical laws of similarity and contagion. In most of these cases, respondents are aware that their responses (usually rejections, as of fudge crafted to look like dog feces, or a food touched by a sterilized, dead cockroach) are not “scientifically” justified, but they are willing to avow them. We interpret this, in some sense, as “heart over head.” We report in this study that American adults and undergraduates are substantially less likely to acknowledge magical effects when the judgments involve money (amount willing to pay to avoid an “unpleasant” magical contact) than they are when using preference or rating measures. We conclude that in “head-heart” conflicts of this type, money tips the balance towards the former, or, in other words, that money makes the mind less magical.

In forecasting and decision making, people can and often do represent a degree of belief in some proposition. At least two separate constructs capture such degrees of belief: likelihoods capturing evidential balance and support capturing evidential weight. This paper explores the weight or justification that evidence affords propositions, with subjects communicating using a belief function in hypothetical legal situations, where justification is a relevant goal. Subjects evaluated the impact of sets of 1–3 pieces of evidence, varying in complexity, within a hypothetical legal situation. The study demonstrates the potential usefulness of this evidential weight measure as an alternative or complement to the more-studied probability measure. Subjects’ responses indicated that weight and likelihood were distinguished; that subjects’ evidential weight tended toward single elements in a targeted fashion; and, that there were identifiable individual differences in reactions to conflicting evidence. Specifically, most subjects reacted to conflicting evidence that supported disjoint sets of suspects with continued support in the implicated sets, although an identifiable minority reacted by pulling back their support, expressing indecisiveness. Such individuals would likely require a greater amount of evidence than the others to counteract this tendency in support. Thus, the study identifies the value of understanding evidential weight as distinct from likelihood, informs our understanding of the psychology of individuals’ judgments of evidential weight, and furthers the application and meaningfulness of belief functions as a communication language.

Are people willing to gamble more for themselves than what they deem reasonable for others? We addressed this question in a simplified computer gambling task in which subjects chose from a set of 10 cards. Subjects selected one card at a time after being instructed that 9 cards were good (win a dollar per card) and one was really bad (lose all the money and end the game). Subjects could stop playing at any time to collect their winnings. Some subjects played the game, others observed a confederate. Both groups took risks beyond what was rational (i.e., 5 cards) but actors were riskier than observers. The actor/observer asymmetry occurred even after controlling for monetary outcome (i.e., having observers win prizes) and after controlling for how the question was framed (i.e., asking observers what they themselves would do as opposed to what the confederate should do). We discuss these results in relation to theories of decision making that emphasize separate contributions of rational and experiential systems.

Previous research has demonstrated that consistency between people’s behavior and their dispositions has predictive validity for judgments of regret. Research has also shown that differences in the personality variable of action orientation can influence ability to regulate negative affect. The present set of studies was designed to investigate how both consistency factors and action-state personality orientation influence judgments of regret. In Study 1, we used a recalled life event to provide a situation in which the person had experienced either an action or inaction. Individuals with an action orientation experienced more regret for situations involving inaction (staying home) than situations involving action (going out). State-oriented individuals, however, maintained high levels of regret and did not differ in their regret ratings across either the action or inaction situations. In Study 2, participants made realistic choices involving either an action or inaction. Our findings revealed the same pattern of results: action-oriented individuals who chose an option that involved not acting (inaction) had more regret that individuals who chose an option that involved acting (action). State-oriented individuals experienced high levels of regret regardless of whether they chose to act or not to act.

We propose a constructed-choice model for general decision making. The model departs from utility theory and prospect theory in its treatment of multiple goals and it suggests several different ways in which context can affect choice.

It is particularly instructive to apply this model to protective decisions, which are often puzzling. Among other anomalies, people insure against non-catastrophic events, underinsure against catastrophic risks, and allow extraneous factors to influence insurance purchases and other protective decisions. Neither expected-utility theory nor prospect theory can explain these anomalies satisfactorily. To apply this model to the above anomalies, we consider many different insurance-related goals, organized in a taxonomy, and we consider the effects of context on goals, resources, plans and decision rules.

The paper concludes by suggesting some prescriptions for improving individual decision making with respect to protective measures.

While previous research has found that children make more risky decisions than their parents, little is known about the developmental trajectory for the ability to make advantageous decisions. In a sample of children, 5-11 years old, we administered a new risky decision making task in which the relative expected value (EV) of the risky and riskless choice options was varied over trials. Younger children (age 5-7) showed significantly less responsiveness to EV differences than their parents on both trials involving risky gains and trials involving risky losses. For older children (age 8-11) this deficit was smaller overall but was greater on loss trials than on gain trials. Children of both ages made more risky choices than adults when risky choices were disadvantageous. We further analyzed these results in terms of children's ability to utilize probability and outcome information, and discussed them in terms of developing brain structures vital for decision making under uncertainty.

Open-ended methods that elicit willingness-to-pay (WTP) in terms of absolute dollars often result in high rates of questionable and highly skewed responses, insensitivity to changes in health state, and raise an ethical issue related to its association with personal income. We conducted a 2x2 randomized trial over the Internet to test 4 WTP formats: 1) WTP in dollars; 2) WTP as a percentage of financial resources; 3) WTP in terms of monthly payments; and 4) WTP as a single lump-sum amount. WTP as a percentage of financial resources generated fewer questionable values, had better distribution properties, greater sensitivity to severity of health states, and was not associated with income. WTP elicited on a monthly basis also showed promise.

Researchers in the decision making tradition usually analyze multiple decisions within experiments by aggregating choices across individuals and using the individual subject as the unit of analysis. This approach can mask important variations and patterns within the data. Specifically, it ignores variations in decisions across a task or game and possible influences of characteristics of the subject or the experiment on these variations. We demonstrate, by reanalyzing data from two previously published articles, how a mixed model analysis addresses these limitations. Our results, with a modified Iowa gambling task and a prisoner's dilemma game, illustrate the ways in which such an analysis can test hypotheses not possible with other techniques, is more parsimonious, and is more likely to be faithful to theoretical models.

Some decision situations are so objectionable or repugnant that people refuse to make a choice. This paper seeks to better understand taboo responses, and to distinguish choices that are truly taboo from those that are merely difficult or confusing. Using 22 scenarios that describe potentially taboo issues, Experiment 1 explores reasons for disapproval of the scenarios. We measure a large number of possible reasons for disapproval and a variety of preference responses (including willingness to accept), in order to test for subtleties in taboo responses. We also test cognitive and affective responses to the scenarios. Experiment 2 further explores the interaction, found in Experiment 1, between affective and cognitive factors. Taken as a whole, our results show that people are able to indicate their disapproval consistently across a variety of preference elicitation methods, that their disapproval is better understood as an attitude measure than as an economic valuation (even when the measure is in monetary terms), and that taboo responses are driven primarily by affect.

Our previous research suggests that people reporting a stronger desire to maximize obtain worse life outcomes (Bruine de Bruin et al., 2007). Here, we examine whether this finding may be explained by the decision-making styles of self-reported maximizers. Expanding on Schwartz et al. (2002), we find that self-reported maximizers are more likely to show problematic decision-making styles, as evidenced by self-reports of less behavioral coping, greater dependence on others when making decisions, more avoidance of decision making, and greater tendency to experience regret. Contrary to predictions, self-reported maximizers were more likely to report spontaneous decision making. However, the relationship between self-reported maximizing and worse life outcomes is largely unaffected by controls for measures of other decision-making styles, decision-making competence, and demographic variables.

People report themselves to be above average on simple tasks and below average on difficult tasks.This paper proposes an explanation for this effect that is simpler than prior explanations. The new explanation is that people conflate relative with absolute evaluation, especially on subjective measures.The paper then presents a series of four studies that test this conflation explanation.These tests distinguish conflation from other explanations, such as differential weighting and selecting the wrong referent.The results suggest that conflation occurs at the response stage during which people attempt to disambiguate subjective response scales in order to choose an answer.This is because conflation has little effect on objective measures, which would be equally affected if the conflation occurred at encoding.

People have been shown to delay decision making to wait for missing noninstrumental attribute information — information that would not have altered their decision if known at the outset — with this delay originally attributed to uncertainty obscuring one’s true preference (Bastardi & Shafir, 1998). To test this account, relative to an alternative that delay arises from low confidence in one’s preference (Tykocinski & Ruffle, 2003), we manipulated information certainty and the magnitude of a penalty for delay, the latter intended to reduce the influence of easily resolved sources of delay and to magnify any influence of uncertainty. Contrary to expectations, the results were largely inconsistent with the uncertainty account in that, under a low penalty, delay did not depend on information certainty; and, under a high penalty, delay rate was actually much lower when information was uncertain. To explain the latter, we propose that people use a strategy for resolving choice under uncertainty that does not require establishing a confident preference for each value of the missing information. These findings are related to others in which choice difficulty has been found to be a major source of delay.

In markets with asymmetric information, only sellers have knowledge about the quality of goods. Sellers may of course make a declaration of the quality, but unless there are sanctions imposed on false declarations or reputations are at stake, such declarations are tantamount to cheap talk. Nonetheless, in an experimental study we find that most people make honest declarations, which is in line with recent findings that lies damaging another party are costly in terms of the liar's utility. Moreover, we find in this experimental market that deceptive sellers offer lower prices than honest sellers, which could possibly be explained by the same wish to limit the damage to the other party. However, when the recipient of the offer is a social tie we find no evidence for lower prices of deceptive offers, which seems to indicate that the rationale for the lower price in deceptive offers to strangers is in fact profit-seeking (by making the deal more attractive) rather than moral.

We study whether probability weighting is observed when individuals are presented with a series of choices between lotteries consisting of real non-monetary adverse outcomes, electric shocks. Our estimation of the parameters of the probability weighting function proposed by Tversky and Kahneman (1992) are similar to those obtained in previous studies of lottery choice for negative monetary payoffs and negative hypothetical payoffs. In addition, common ratio violations in choice behavior are widespread. Our results provide evidence that probability weighting is a general phenomenon, independent of the source of disutility.

Many natural decisions contain an element of skill. Modern conceptions of the skill component include control (Goodie, 2003) and competence (Heath & Tversky, 1991). The control hypothesis states that a task's skill component (the sensitivity of the task to skill) affects decision making; the competence hypothesis states decision making is affected only if the participant possesses the skill. Three experiments compared risk taking patterns between two groups. One group faced bets on random events, and another group faced bets on their answers to general knowledge questions, which is a task characterized by control. In Experiment 1, control increased risk taking markedly with all statistical properties held constant. In Experiment 2, decisions made in domains of varying difficulty, and by individuals of varying ability, yielded further qualified support for the role of competence. In Experiment 3, the role of control was replicated, and participants’ perceptions of the differences in group treatments aligned more with the implications of the control hypothesis than with the competence hypothesis. Results offered support for the control hypothesis across a range of competence.

We report a study of the effects the choice set on financial decision making related to retirement savings and risky investment. The participants were presented with either a full range of choice options or a limited subset of the feasible options. The choices of saving and risk are affected by the position of each option in the range of presented options. This result demonstrated that the range of the options offered as possible saving rates and levels of investment risk influences decisions about saving and risk. The study was conducted on a sample of working people, and we controlled whether the participants can financially afford in their real life the decisions taken in the test. In addition, various measures of risk aversion did not account for the risk taken in each condition. Surprisingly, only the simplest and most direct risk preference measure was a significant predictor of the responses within a particular choice set context, although the actual choices were still very much influenced by the range. Thus, the results reported here suggest that financial judgments and choices are relative, which corroborates, in an important practical domain, previous related work with abstract gambles and hypothetical risky investments.

Research in judgment and decision making generally ignores the distinction between factual and subjective feelings of ownership, tacitly assuming that the two correspond closely. The present research suggests that this assumption might be usefully reexamined. In two experiments on the endowment effect we examine the role of subjective ownership by independently manipulating factual ownership (i.e., what participants were told about ownership) and physical possession of an object. This allowed us to disentangle the effects of these two factors, which are typically confounded. We found a significant effect of possession, but not of factual ownership, on monetary valuation of the object. Moreover, this effect was mediated by participants’ feelings of ownership, which were enhanced by the physical possession of the object. Thus, the endowment effect did not rely on factual ownership per se but was the result of subjective feelings of ownership induced by possession of the object. It is these feelings of ownership that appeared to lead individuals to include the object into their endowment and to shift their reference point accordingly. Potential implications and directions for future research are discussed.

The Ratio-Bias phenomenon, observed by psychologist Seymour Epstein and colleagues, is a systematic manifestation of irrationality. When offered a choice between two lotteries, individuals consistently choose the lottery with the greater number of potential successes, even when it offers a smaller probability of success. In the current study, we conduct experiments to confirm this phenomenon and test for the existence of Bias as distinct from general irrationality. Moreover, we examine the effect of introducing a monetary incentive of varying size (depending on the treatment) on the extent of irrational choices within this framework. We confirm the existence of the Bias. Moreover, the existence of an incentive significantly reduces the extent of irrationality exhibited, and that this effect is roughly linear in response to changes in the size of the incentive within the magnitudes investigated.

The Allais Paradox, or common consequence effect, has been a standard challenge to normative theories of risky choice since its proposal over 60 years ago. However, neither its causes nor the conditions necessary to create the effect are well understood. Two experiments test the effects of losses and event splitting on the Allais Paradox. Experiment 1 found that the Allais Paradox occurs for both gain and mixed gambles and is reflected for loss gambles produced by reflection across the origin. Experiment 2 found that the Allais Paradox is eliminated by splitting the outcomes even when the probabilities used do not increase the salience of the common consequence. The results of Experiment 1 are consistent with Cumulative Prospect Theory, the current leading theory of risky choice. However, the results of Experiment 2 are problematic for Cumulative Prospect Theory and suggest that alternate explanations for the Allais Paradox must be sought.