Stewart, N. and Chater, N. and Brown, G.D.A. (2006) Decision by sampling. (ELSE Working Papers 204). ESRC Centre for Economic Learning and Social Evolution: London, UK.
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Abstract
We present a theory of decision by sampling (DbS) in which, in contrast with traditional models, there are no underlying psychoeconomic scales. Instead, we assume that an attribute's subjective value is constructed from a series of binary, ordinal comparisons to a sample of attribute values drawn from memory and is its rank within the sample. We assume that the sample reflects both the immediate distribution of attribute values from the current decision's context and also the background, real-world distribution of attribute values. DbS accounts for concave utility functions; losses looming larger than gains; hyperbolic temporal discounting; and the overestimation of small probabilities and the underestimation of large probabilities.
| Type: | Working / discussion paper |
|---|---|
| Title: | Decision by sampling |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php#2006 |
| Language: | English |
| Additional information: | Please see http://eprints.ucl.ac.uk/11570/ for a version published in Cognitive Psychology |
| Keywords: | Judgment, decision making, sampling, memory, utility, gains and losses, temporal discounting, subjective probability |
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