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Understanding preferences in experience-based choice: A study of cognition in the wild

McAndrew, C; Gore, J; (2013) Understanding preferences in experience-based choice: A study of cognition in the wild. Journal of Cognitive Engineering and Decision Making , 7 (2) 179 - 197. 10.1177/1555343412463922. Green open access

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Abstract

The objective of this article is to improve our understanding of preferences in experienced-based choice. Positioned within the framework of naturalistic decision making, this article responds to the recent call to complement the examination of experience-based choice with studies of cognition in the “wild.” We document an exploratory field study that uses applied cognitive task analysis (ACTA) to examine financial day traders’ preferences. Providing real-world examples, our study illustrates how day traders construct their understanding of gains relative to losses and emphasizes the relevance of prospect theory for understanding the asymmetry of human choice. The fourfold pattern of preferences as studied in the wild is risk seeking for medium- and high-probability gains, risk averse for small-probability gains, risk averse for small-probability losses, and risk averse for medium- and high-probability losses. Our results differ from the fourfold pattern of preferences exhibited by experience-based choice when studied in the laboratory. The implications of this work for prospect theory and the distinction between “experience through learning” and “experience through professional training” are discussed alongside the merits of the ACTA technique for professional expert domain-based knowledge elicitation.

Type: Article
Title: Understanding preferences in experience-based choice: A study of cognition in the wild
Open access status: An open access version is available from UCL Discovery
DOI: 10.1177/1555343412463922
Publisher version: http://dx.doi.org/10.1177/1555343412463922
Additional information: © 2012, Human Factors and Ergonomics Society. This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 3.0 License (http://www.creativecommons.org/licenses/by-nc/3.0/) which permits non-commercial use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page(http://www.uk.sagepub.com/aboutus/openaccess.htm).
Keywords: naturalistic decision making; experience-based choice; preference; applied cognitive task analysis; day trading;
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > The Bartlett School of Architecture
URI: https://discovery.ucl.ac.uk/id/eprint/1403289
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