Ilana Ritov

Emotion-based choice.

In this article the authors develop a descriptive theory of choice using anticipated emotions. People are assumed to anticipate how they will feel about the outcomes of decisions and use their predictions to guide choice. The authors measure the pleasure associated with monetary outcomes of gambles and offer an account of judged pleasure called decision affect theory. Then they propose a theory of choices between gambles based on anticipated pleasure. People are assumed to choose the option with greater subjective expected pleasure. Similarities and differences between subjective expected pleasure theory and subjective expected utility theory are discussed. Emotions have powerful effects on choice. Our actual feelings of happiness, sadness, and anger both color and shape our decisions. In addition, our imagined feelings of

Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues

Participants in contingent valuation surveys and jurors setting punitive damages in civil trials provide answers denominated in dollars. These answers are better understood as expressions of attitudes than as indications of economic preferences. Well-established characteristics of attitudes and of the core process of affective valuation explain several robust features of dollar responses: high correlations with other measures of attractiveness or aversiveness, insensitivity to scope, preference reversals, and the high variability of dollar responses relative to other measures of the same attitude.

Status-Quo and Omission Biases

Bias toward the status quo, found in choice and in emotional reactions to adverse outcomes, has been confounded with bias toward omission. We unconfounded these effects with scenarios in which change occurs unless action is taken. Subjects reacted more strongly to adverse outcomes caused by action, whether the status quo was maintained or not, and subjects preferred inaction over action even when inaction was associated with change. No status-quo bias was found in a matching task, which did not require action. The observed status-quo bias is at least partly caused by a bias toward omissions.

Stated Willingness to Pay for Public Goods: A Psychological Perspective

In the contingent valuation method for the valuation of public goods, survey respondents are asked to indicate the amount they are willing to pay (WTP) for the provision of a good. We contrast economic and psychological analyses of WTP and describe a study in which respondents indicated their WTP to prevent or to remedy threats to public health or to the environment, attributed either to human or to natural causes. WTP was significantly higher when the cause of a harm was human, though the effect was not large. The means of WTP for 16 issues were highly correlated with the means of other measures of attitude, including a simple rating of the importance of the threat. The responses are better described as expressions of attitudes than as indications of economic value, contrary to the assumptions of the contingent valuation method.

Determinants of Stated Willingness to Pay for Public Goods: A Study in the Headline Method

Respondents were shown brief statements (“headlines”) referring to various threats to the environment or to public health, and other public issues. An intervention to deal with each problem was also introduced by a single sentence. Some respondents were asked to indicate their willingness to pay for the interventions by voluntary contributions. Others indicated their opinion of the intervention on a conventional rating scale, rated the personal satisfaction of contributing to it, or rated the importance of the problem. Group averages of these response measures were obtained for a large set of issues. Computed over issues, the rank-order correlations between the different measures were very high, suggesting that group averages of WTP and of other opinion statements are measures of the same public attitudes. Observed preference reversals and violations of monotonicity in contributions are better explained by a concept of attitude than by the notion of economic value that underlies the contingent valuation method. Contributions and purchases do not follow the same logic. Possible implications for the contingent valuation method are discussed.

Intuitions about Penalties and Compensation in the Context of Tort Law

Students, retired judges, economists, and others made judgments of appropriate penalties and compensation for hypothetical injuries. In some scenarios, compensation was paid by the government and penalties were paid to the government, so the two could differ. Penalties were generally uninfluenced by their deterrent effect on future behavior. Penalties were greater when they were paid directly to the victim than when they were paid to the government. Compensation was affected by whether injuries were caused by people or by nature, or by acts vs. omissions. These effects are not justified according to consequentialist views of penalties and compensation. We suggest that people are overgeneralizing reasonable rules and that such overgeneralization may be involved in perverse effects of tort law.

Framing Effects in the Evaluation of Multiple Risk Reduction

We studied how evaluation of changes in low-probability risks are affected by reference points and framing effects. Subjects considered hypothetical situations with one or two low-probability risks. Different frames were used to describe changes in risk levels. In the first experiment, subjects chose between risk-reduction options that achieved the same overall risk reduction: large reduction of one risk vs. equal (smaller) reduction of two risks. When the risks were described as losses relative to the no-risk ideal, more subjects were indifferent between the options than when the same options were described as gains relative to the status quo. In the latter case subjects preferred equal reduction of both risks, unless one risk could be reduced to zero. In a related experiment, subjects were less willing to pay any price for a commodity that carried small increases in two risks than for a commodity carrying a comparable large increase in one risk. In other experiments, subjects evaluated single changes in risks rather than comparing or evaluating pairs of changes. Subjects again placed particularly high value on reducing any risks to zero, and they were even more inclined to do so when some other risk would also be reduced to zero. In a final experiment, elimination of risk was found to be less highly valued if its source was not fully eliminated, and a status-quo effect was found. The findings are interpreted in terms of reference theories of choice.

Routine and the perception of time

The authors investigated the influence of routine on peoples estimation of time, testing the hypothesis that duration is remembered as being shorter when time is spent in a routine activity. In 4 experiments and 2 field studies, the authors compared time estimations in routine and nonroutine conditions. Routine was established by a sequence of markers (Study 1), variation of the task (Studies 2 and 3), or the number of repetitive blocks (Study 4). As hypothesized, the duration of the task was remembered as being shorter in routine conditions than in nonroutine ones. This trend was reversed in experienced (prospective) judgments when participants were informed beforehand of the duration-judgment task (Study 3). In Studies 5 and 6, the authors examined remembered duration judgments of vacationers and kibbutz members, which provided further support for the main hypothesis.

Differential weighting of common and distinctive components

We investigated possible explanations of the finding that the relative weight (W) of common components in similarity judgments is higher for verbal than for pictorial stimuli. A serial presentation of stimulus components had no effect on verbal stimuli; it increased the impact of both common and distinctive components of pictorial stimuli but did not affect their relative weight. On the other hand, W was increased by manipulations that reduced the cohesiveness of composite pictures, such as separating, scrambling, and mixing their components. Furthermore, W was decreased by manipulations that enhanced the cohesiveness of composite verbal stimuli by imposing structure on their components. Verbal and pictorial representations of the same stimuli yielded no systematic differences in W.

Experience in Integrative Negotiations: What Needs to Be Learned?

In this research we focus on the roles of experience and understanding in fostering integrative negotiation performance. We report on two experiments in which we distinguish between understanding opponents’ general priorities among issues versus understanding their speciWc gains for particular oVers. Although experience enhanced integrative performance even in the absence of understanding, we found that understanding the speciWc gains had an incremental eVect on performance. We conclude that while generally acknowledging opponents’ interests is not suYcient, the additional inferential step of assessing their speciWc gains throughout the negotiation process is advantageous.