Probability Weighting and Cognitive Ability

• 成果类型: Article
• 署名作者: Choi, Syngjoo; Kim, Jeongbin; Lee, Eungik; Lee, Jungmin
• 署名单位: Seoul National University (SNU); National University of Singapore; New York University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4146
• 发表日期: 2022
• 页码: 5201-5215
• 关键词: Probability weighting; Cognitive ability; Likelihood insensitivity; Time pressure

摘要

Probability weighting is a major concept for accommodating systematic departures from expected utility theory. We examine the relation between probability weighting and cognitive ability with two experiments: one recruiting subjects with a large variation in cognitive ability and the other using the within-subject manipulation of time constraints in lottery choices and cognitive tests. We find a significant association between likelihood insensitivity-the cognitive component of probability weighting-and cognitive limitation such that subjects with a lower cognitive score or more interrupted cognition due to time pressure respond less discriminately to intermediate probabilities and more over-sensitively to extreme probabilities. Our findings shed light on the sources of anomalous choices against expected utility theory.