An examination of the behavioral effect of repeated terrorist attacks reveals that local residents (of the attacked area) appear to be much less sensitive to this risk than international tourists. Furthermore, the limited sensitivity on the part of local residents seems to diminish with time,...

Erev, Ert, and Roth organized three choice prediction competitions focused on three related choice tasks: one shot decisions from description (decisions under risk), one shot decisions from experience, and repeated decisions from experience. Each competition was based on two experimental...

Mainstream explanations to gambling specify conditions under which human agents are locally risk loving. Such theories, however, fail to explain the typically observed prize distribution of a few large prizes and a large number of medium ones--hence the medium prizes paradox. In the current...

Timing and frequency of punishment are critical elements in law enforcement. Previous studies suggest the superiority of immediate punishment schemes over delayed punishment, as well as the importance of frequent punishment. Yet law enforcement schemes which utilize both frequent and immediate...

Three experiments are presented that compare alternative explanations to the coexistence of risk aversion and under-diversification in investment decisions. The participants were asked to select one of several assets under two feedback conditions. In each case, one asset was a weighted...

In a given period, a diversified fund, by virtue of being a weighted average, will perform somewhere in the middle range of its components' respective performances. This means that adaptive investors who look to the past to adjust expectations about future returns will shun diversified funds....

A new evaluation method is proposed for comparing learning models used for predicting decisions based on experience. The method is based on the generalization of models' predictions at the individual level. First, it evaluates the ability to make a priori predictions for decisions in new tasks...

This paper examines how observing other people's behavior affects risk taking in repeated decision tasks. In Study 1, 100 participants performed experience-based decision tasks either alone or in pairs, with the two members being exposed to each others' choices and outcomes. The tasks involved...