Home Mind & Brain International Study Confirms the Validity of Prospect Theory on Decision-Making

International Study Confirms the Validity of Prospect Theory on Decision-Making

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Anna Cortijos Bernabeu, former student of the Faculty of Psychology of the University of Barcelona, took part in this study while she was studying the master’s degrees in Research on Behaviour and Cognition and Psychosocial Intervention. The study, published in the journal Nature Human Behaviour, was carried out as part of the Junior Research Programme, a research programme managed by volunteer academics and students, which offers the opportunity to start in the field of research in an international context.

A sample with more than 4,000 people

The study was based on a large international sample, larger than the one in the original study, with data taken from more than 4,000 people from 19 countries and speakers of 13 languages. Researchers, supervised by Kai Ruggeri, from Columbia University, used very similar methods to the ones from the 1979 study.

Participants received 17 questions – the same ones from the original study – on decisions that involved potential financial gains or losses, such as ‘Would you rather win 3,000 euros with a 100% probability of winning or losing, or 4,000 euros with a 80% probability and 20% of getting nothing?’.

According to the researchers, results show people prefer the first option, although the second one, in average, provides a higher sum. People would rather lose 4,000 euros with a 80% probability than losing 3,000 with a 100% probability of losing, although the former option involves a higher loss, in average.

‘In these examples we can see that people do not act rationally; we are more likely to choose the risky option when the second one offers a certain gain, albeit a lower amount. However, we are more likely to accept the riskier option when the alternative shows a certain loss, albeit lower,’ notes Anna Cortijos.

Response patterns were similar to the original study

These results confirm that response patterns in decision-making in risky situations are similar to the ones in the original study, although the size of its effect is inferior. ‘We can still say that people take more risks to avoid a loss but we assume less risks when we are offered choices presented as potential gains. Also, this fact seems to be general in many parts of the world,’ notes the researcher.

Research against result replication crisis

The importance of this study is framed within the result replication crisis undergone in psychology and other related sciences. During the last years, theories that were consolidated have been questioned due a lack of work reproducing results of the studies they were based on. ‘The prospect theory, now consolidated, has been used to implement guidelines, strategies and public policies in areas ranging from economics to behavioural sciences. Therefore, having replicated results is very relevant and a reason to be relieved,’ concludes Anna Cortijos.


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