Comparison of the Distortion of Probability Information in Decision Under Risk and an Equivalent Visual Task

Abstract

Decision makers typically overweight small probabilities and underweight large probabilities. However, there are recent reports that when probability is presented in the form of relative frequencies, this typical pattern reverses. We tested this hypothesis by comparing decision making in two tasks: In one task, probability was stated numerically, and in the other task, it was conveyed through a visual representation. In the visual task, participants chose whether a "stochastic bullet" should be fired at either a large target for a small reward or a small target for a large reward. Participants' knowledge of probability in the visual task was the result of extensive practice firing bullets at targets. In the classical numerical task, participants chose between pairs of lotteries with probabilities and rewards matched to the probabilities and rewards in the visual task. We found that participants' probability-weighting functions were significantly different in the two tasks, but the pattern for the visual task was the typical, not the reversed, pattern.

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