Unexpected wins in both humans and monkeys increase risk taking
Friday, May 26, 2023 - 09:57
in Psychology & Sociology
How do humans make decisions when the outcomes are uncertain? One possible way would be to calculate the expected value of each option by multiplying each possible outcome amount by its probability and then choosing the option with the highest expected value. While this strategy would maximize the payoff in expectation, this is not what people tend to do. In particular, people seem to be irrationally influenced by past outcomes of their decisions when making subsequent choices.