According to prospect theory, people overweight low probability events and underweight high probability events. Several recent papers (notably, Hertwig, Barron, Weber \& Erev, 2004) have argued that although this pattern holds for ``description-based'' decisions, in which people are explicitly...

This paper extends previous research showing that experienced difficulty of recall can influence evaluative judgments (e.g., Winkielman \& Schwarz, 2001) to a field study of university students rating a course. Students completed a mid-course evaluation form in which they were asked to list...

Many psychology experiments show that individually judged probabilities of the same event can vary depending on the partition of the state space (a framing effect called partition-dependence). We show that these biases transfer to competitive prediction markets in which multiple informed traders...

We argue that people intuitively distinguish epistemic (knowable) uncertainty from aleatory (random) uncertainty and show that the relative salience of these dimensions is reflected in natural language use. We hypothesize that confidence statements (e.g., “I am fairly confident,” “I am 90%...

People view uncertain events as knowable in principle (epistemic uncertainty), as fundamentally random (aleatory uncertainty), or as some mixture of the two. We show that people make more extreme probability judgments (i.e., closer to 0 or 1) for events they view as entailing more epistemic...

Policymakers and business leaders often use peer comparison information—showing people how their behavior compares to that of their peers—to motivate a range of behaviors. Despite their widespread use, the potential impact of peer comparison interventions on recipients’ well-being is...

Decision and risk analysts have considerable discretion in designing procedures for eliciting subjective probabilities. One popular approach is to specify a particular set of exclusive and exhaustive events for which the assessor provides subjective probabilities. We show that assessed...

In recent years, consumer financial decision making has moved into the academic research and policy making spotlights, motivated not only by increased concern with the financial protection of vulnerable individuals but also due to the ascendance of well-being as an important policy making...

Previous studies of employee investment in retirement plans suggest that people typically naively diversify their investment funds, tending to allocate 1/n of the total to each of n available instruments (Benartzi amp; Thaler, 2001). In this paper we provide experimental evidence that this bias...