Riddles can teach us psychology when we stop to consider the psychological principles that make them “work”. This paper studies a particular class of riddles that we call stumpers, and provides analysis of the various principles (some familiar, some novel) that inhibit most people from finding the correct solution – or any solution – even though they find the answers obvious ex post. We restrict our analysis to four stumpers, propose the psychological antecedents of each, and provide experimental support for our conjectures.

We propose that in strategic interactions a player is influenced by self-similarity. Self-similarity means that a player who chooses some action X tends to believe, to a greater extent than a player who chooses a different action, that other players will also choose action X. To demonstrate this phenomenon, we analyze the actions and the reported beliefs of players in a two-player two-action symmetric game. The game has the feature that for “materialistic” players, who wish to maximize their own payoff, there should be negative correlation between players’ actions and the beliefs that they assign to their opponent choosing the same action. We first elicit participants’ preferences over the outcomes of the game, and identify a large group of materialistic players. We then ask participants to choose an action in the game and report their beliefs. The reported beliefs of materialistic players are positively correlated with their actions, i.e., they are more likely to choose an action the stronger is their belief that their opponent will also choose the same action. We view this pattern as evidence for the presence of self-similarity.

People tend to prefer smaller and sooner (SS) rewards over larger and later (LL) ones even when the latter are much larger. Previous research have identified several ways to enhance people’s patience. Adding to this literature, the current paper demonstrates that introduction of upfront losses as well as gains to both SS and LL rewards can decrease people’s impatience. This effect is incompatible with both the normative exponential and descriptive hyperbolic discounting models, which agree on the additive assumption and the independence assumption. We also exculde the integration explanation which assumes subjects integrate upfront money with final rewards and make a decision with bottom line at the end. We consider several possible explanations, including the salience hypothesis, which states that introducing upfront money makes the money dimension more salient than not and thus increases the attractiveness of LL options.

Researchers know very little about how people choose mates. To remedy this, the present study examined the influence of number of potential mates and mate-standard strength on single women’s choice satisfaction and strategy use. Single women chose one potential partner from a set of 4, 24, or 64 options presented on a real dating website. Participants adjusted to an increasing number of options by changing their decision-making strategies, such that they relied on noncompensatory, attribute-based strategies as the number of options increased. Across conditions they reported similar levels of satisfaction with the choice process and the person selected. Mate-standard strength qualified some of the results, however, as women with higher mate standards preferred extensive choice, and they tended to prefer compensatory choice strategies and were more satisfied with the option selected when he was selected from among many.

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.

We used psychological methods to investigate how two prominent interventions, participatory decision making and enforcement, influence voluntary cooperation in a common-pool resource dilemma. Groups (N=40) harvested resources from a shared resource pool. Individuals in the Voted-Enforce condition voted on conservation rules and could use economic sanctions to enforce them. In other conditions, individuals could not vote (Imposed-Enforce condition), lacked enforcement (Voted condition), or both (Imposed condition). Cooperation was strongest in the Voted-Enforce condition (Phase 2). Moreover, these groups continued to cooperate voluntarily after enforcement was removed later in the experiment. Cooperation was weakest in the Imposed-Enforce condition and degraded after enforcement ceased. Thus, enforcement improved voluntary cooperation only when individuals voted. Perceptions of procedural justice, self-determination, and security were highest in the Voted-Enforced condition. These factors (legitimacy, security) increased voluntary cooperation by promoting rule acceptance and internalized motivation. Voted-Enforce participants also felt closer to one another (i.e., self-other merging), further contributing to their cooperation. Neither voting nor enforcement produced these sustained psychological conditions alone. Voting lacked security without enforcement (Voted condition), so the individuals who disliked the rule (i.e., the losing voters) pillaged the resource. Enforcement lacked legitimacy without voting (Imposed-Enforce condition), so it crowded out internal reasons for cooperation. Governance interventions should carefully promote security without stifling fundamental needs (e.g., procedural justice) or undermining internal motives for cooperation.

Presidential elections can be forecast using information from political and economic conditions, polls, and a statistical model of changes in public opinion over time. However, these “knowns” about how to make a good presidential election forecast come with many unknowns due to the challenges of evaluating forecast calibration and communication. We highlight how incentives may shape forecasts, and particularly forecast uncertainty, in light of calibration challenges. We illustrate these challenges in creating, communicating, and evaluating election predictions, using the Economist and Fivethirtyeight forecasts of the 2020 election as examples, and offer recommendations for forecasters and scholars.

Ambiguity aversion has been widely observed in individuals’ judgments. Using scenarios that are typical in decision analysis, we investigate ambiguity aversion for pairs of individuals. We examine risky and cautious shifts from individuals’ original judgments to their judgments when they are paired up in dyads.

In our experiment the participants were first asked to specify individually their willingness-to-pay for six monetary gambles. They were then paired at random into dyads, and were asked to specify their willingness-to-pay amount for the same gambles. The dyad’s willingness-to-pay amount was to be shared equally by the two individuals. Of the six gambles in our experiment, one involved no ambiguity and the remaining five involved different degrees of ambiguity. We found that dyads exhibited risk aversion as well as ambiguity aversion. The majority of the dyads exhibited a cautious shift in the face of ambiguity, stating a smaller willingness-to-pay than the two individuals’ average. Our study thus confirms the persistence of ambiguity aversion in a group setting and demonstrates the predominance of cautious shifts for dyads.

Previous research on the role of choice set size in decision making has focused on decision outcomes and satisfaction. In contrast, little is known about interindividual differences in preferences for larger versus smaller choice sets, let alone the causes of such differences. Drawing on self-efficacy theory, two studies examined the role of decision-making self-efficacy in preferences for choice. Using a correlational approach, Study 1 (n = 89) found that decision-making self-efficacy was positively associated with preferences for choice across a range of consumer decisions. This association was found both between- and within-subjects. Study 2 (n = 65) experimentally manipulated decision-making self-efficacy for an incentive-compatible choice among photo printers. Preferences for choice and pre-choice information seeking were significantly lower in a low-efficacy condition compared to a high-efficacy condition and a control group. Future research directions and implications for decision-making theory and public policy are discussed.

Although the priority heuristic (PH) is conceived as a cognitive-process model, some of its critical process assumptions remain to be tested. The PH makes very strong ordinal and quantitative assumptions about the strictly sequential, non-compensatory use of three cues in choices between lotteries: (1) the difference between worst outcomes, (2) the difference in worst-case probabilities, and (3) the best outcome that can be obtained. These aspects were manipulated orthogonally in the present experiment. No support was found for the PH. Although the main effect of the primary worst-outcome manipulation was significant, it came along with other effects that the PH excludes. A strong effect of the secondary manipulation of worst-outcome probabilities was not confined to small differences in worst-outcomes; it was actually stronger for large worst-outcome differences. Overall winning probabilities that the PH ignores exerted a systematic influence. The overall rate of choices correctly predicted by the PH was close to chance, although high inter-judge agreement reflected systematic responding. These findings raise fundamental questions about the theoretical status of heuristics as fixed modules.

Risk behavior can be capricious and may vary from month to month. We study 62 clients of a private bank in Northern Italy. The individuals are of special interest for several reasons. As active traders, they manage the value-at-risk (VaR) of a portion of their wealth portfolios. In addition, they act alone, i.e., without input from a financial adviser. Based on VaR-statistics, we find that, in general, the subjects become more risk-averse after suffering losses and more risk-seeking after experiencing gains. The monthly gains and losses that alter investor risk behavior represent true changes in wealth but are “on paper” only, i.e., not immediately realized. Our results allow several interpretations, but they are not at odds with a house money effect, or the possibility that overconfident investors trade on illusions. Rapidly shifting risk behavior in fast response to unstable circumstances weakens individual risk tolerance as a deep parameter and key construct of finance theory.

By manipulating the scale in graphs, this study demonstrated a new evaluation bias caused by attribute salience in graphical representations. That is, (de)compressing the graph axis scale changed the relative distance with respect to the options of a given attribute and thus changed the salience of the information in graphical representations. Experiment 1 showed that the differences in the graphical representations had a significant impact on the evaluation. Experiment 2 repeated the scale manipulation effect in a different scenario and extended it to a multi-options context. Experiment 3 disentangled the effect of scale distance manipulation from the other variables (e.g., scale resolution and assignment of attributes to axes) and further supported the finding of Experiment 1. These results indicated that attribute salience in graphical representations clearly affects evaluations and that graphs can be manipulated to cause very different impressions of the same data. This finding is not consistent with the axioms of normative economic theory. Experiment 3 also tested the attribute importance hypothesis, but the evidence indicated that the participants did not regard the longer axis as the more important attribute. Finally, we related our findings to the impact of visual processing on decision making and discussed them from the perspective of two-system cognitive theory.

This paper examines the effect of information processing styles (indexed by the Rational-Experiential Inventory of Pacini & Epstein, 1999) on adherence to bias judgments, and particularly to reverse biases; i.e., when two choice questions that comprise identical normative components are set in different situations and yield seemingly opposite behavioral biases. We found consistent evidence for a negative correlation between rational score and adherence to reverse biases, as well as overall biases, for all three pairs of reverse biases tested. Further, this effect of rational thinking was more pronounced for high experiential individuals, in that high-rational and high-experiential participants committed fewer biases than all other participants. These results lend weight to our claim that low-rational individuals, who are more sensitive to the context, are more prone to utilize some attribute of the provided information when it is uncalled for, but at the same time tend to ignore it or give it too little weight when it is a crucial factor in a normative decision process.

While risk research focuses on actions that put people at risk, this paper introduces the concept of “passive risk”—risk brought on or magnified by inaction. We developed a scale measuring personal tendency for passive risk taking (PRT), validated it using a 150 undergraduate student sample, and obtained three factors indicating separate domains of passive risk taking: risk involving resources, medical risks and ethical risks. The scale has criterion validity, as it is correlated with reported passive risk taking in everyday life, and also has high test-retest reliability. While correlated with the DOSPERT scale, the PRT shows divergent validity from classic risk taking constructs like sensation seeking, and convergent validity with tendencies previously not linked to risk taking, such as procrastination and avoidance. The results indicate that passive risk is a separate and unique domain of risk taking, which merits further research to understand the cognitive and motivational mechanism perpetuating it.

We used a diffusion model to examine the effects of response-bias manipulations on response time (RT) and accuracy data collected in two experiments involving a two-choice decision making task. We asked 18 subjects to respond “low” or “high” to the number of asterisks in a 10×10 grid, based on an experimenter-determined decision cutoff. In the model, evidence is accumulated until either a “low” or “high” decision criterion is reached, and this, in turn, initiates a response. We performed two experiments with four experimental conditions. In conditions 1 and 2, the decision cutoff between low and high judgments was fixed at 50. In condition 1, we manipulated the frequency with which low- and high-stimuli were presented. In condition 2, we used payoff structures that mimicked the frequency manipulation. We found that manipulating stimulus frequency resulted in a larger effect on RT and accuracy than did manipulating payoff structure. In the model, we found that manipulating stimulus frequency produced greater changes in the starting point of the evidence accumulation process than did manipulating payoff structure. In conditions 3 and 4, we set the decision cutoff at 40, 50, or 60 (Experiment 1) and at 45 or 55 (Experiment 2). In condition 3, there was an equal number of low- and high-stimuli, whereas in condition 4 there were unequal proportions of low- and high-stimuli. The model analyses showed that starting-point changes accounted for biases produced by changes in stimulus proportions, whereas evidence biases accounted for changes in the decision cutoff.

The current field study compares the time preferences of young adults of similar ages but in two very different environments, one more dangerous and uncertain than the other. Soldiers, college students and a control group of teenagers answered questionnaires about their time preferences. During mandatory service, soldiers live in a violent atmosphere where they face great uncertainty about the near future and high risk of mortality (measured by probability of survival). University students and teenagers live in much calmer environment and are tested for performance only periodically. The soldier-subjects show relatively high subjective discount rates when compared to the other two groups. We suggest that the higher subjective discount rate among soldiers can be the result of high perceived risk in the army as an institution, or higher mortality risk.

The ratio-bias (RB) phenomenon is considered to provide systematic evidence of irrationality. When judging the probability of a low-probability event, many people judge it as less likely when it is expressed as a ratio of small numbers (e.g., 1-in-10) than when it is expressed as a ratio of large numbers (e.g., 10-in-100). Four experiments show that the phenomenon is increased by the experimental paradigm, which misleads subjects regarding the aim of the task by inducing equal-ratio neglect. One factor is constant across the texts of the Experiment 1–3: a particular sentence that induces subjects to neglect the equal ratio and invites them to express feelings about the outcome of the target event rather than giving a rational answer. This intent is strengthened by the formulation of the question (Experiment 1), which explicitly asks the subject to express the feeling connected to the lotteries and the absence of a third option (Experiment 1, 4), the right one, which expresses the “indifference” between the two options. In Experiment 4, the task lacks only the third option, and, simply by adding the option that allows subjects to express the correct answer, the RB disappears.

The use of gamification to motivate engagement has greatly increased the number of ways in which people compete. Many of these competitions allow individuals to see how they rank as a competition progresses. Our work aims to provide a better understanding of how individuals feel about different rank outcomes in competitions. We do this by applying the principles of expected utility theory to elicit utility curves for over 3,000 people across three studies using hypothetical competition scenarios. We find consistent support for the following generalizations: 1) individuals are risk-seeking when in second place, 2) they are risk-averse when in second-to-last place, and 3) the utility decrease going from first to second place is greater than their decrease going from second-to-last to last place. Our results suggest individuals are both last-place averse and first-place seeking, with an even stronger inclination towards the latter.

This is a first study on attachment to national and sacred land and land as a protected value. A measure of attachment to the land of Israel is developed and administered to two groups, Jewish college students in Israel and the United States. Levels of land attachment are high and not significantly different in the two groups, with a great deal of variation. Land may become more important through being inhabited by a group over centuries. This is a positive contagion effect, and is opposed in some cases by negative contagion produced when the “enemies” live on the land for some period of time. We demonstrate a significant correlation of positive contagion sensitivity with attachment to the land of Israel. Unlike many other cases of the interaction of positive and negative contagion, negative contagion does not overwhelm positive contagion in the domain of land attachment. We also present evidence for linkages between political positions, religiosity, importance of Israel, Arab aversion, and vulnerability of Israel with attachment to land, but these do not fully account for the contagion effects. A number of significant differences between Israelis and Americans are described.