Double or Nothing: why we make risky choices

One of my favorite shows in high school to watch on the weekends was Cash Cab. The basic premise of the show is quite simple. Essentially, the show is like any other TV game show in which contestants win money for answering jeopardy questions correctly. The twist? This one takes place from within a taxicab in New York City. Participants answer questions of increasing difficulty, as the driver, who also happens to be the host, drives them to their chosen destination. Anyway, there is this moment at the end of the show when participants can go for double-or-nothing with one last final question. This moment is obviously quite suspenseful and stressful, but I’ve never really understood it. Why would anyone in his or her right mind ever risk the possibility of going home empty handed for the small chance that they could double their winnings? What motivates that type of risky decision-making? Even more so, if we were able to somehow identify what motivates someone to be more or less risk averse, is that something we could manipulate in a systematic way?

In a recent study, researchers Elliot Ludvig, Christopher Madan and Lucia Spetch explored this very idea. Specifically, they were interested to see how people’s behavior in situations in which risky choice decisions were made available, would be altered if before making their choice they were primed with memories of past outcomes. The idea of priming past outcomes comes from the knowledge that people often base decisions on past experiences. We rely on our memories quite a bit, and thus shouldn’t whatever is remembered “most” at the moment a decision is made influence the choice that is ultimately made?

The design of this study was fairly straightforward. In order to employ the use of a prime in the experiment, the researchers first needed to find a way to get the participants to associate some type of object with some sort of outcome. In this study, the object was fruit, and the outcome was a certain number of points. Let me explain. The experiment put participants through a computer simulated “risky-choice task” in which there were four different doors each linked with a fruit that was worth a certain number of points. Three of the doors led to fixed gains of 0, 40 or 80 points, and the fourth door, which was coined the “risky door,” led to a 50/50 chance of earning either 20 or 60 points. This might be hard to visualize, so here’s some help:

Screen Shot 2015-03-19 at 9.53.34 PM

(Ludvig et al., 2014)

In each trial, only two doors were pitted against each other for participants to choose between. I’ll spare all the details of every single door combination, and just say that participants completed quite a few trials so as to establish a relationship between the fruit and it’s reward. Next, participants completed twenty primed decision trials in which prior to the appearance of the two doors, an image of one of the fruits was displayed for .5 seconds. It looked something like this:

Screen Shot 2015-03-19 at 11.32.17 PM

(Ludvig et al., 2014)

Here’s where it gets interesting. Ludvig and his colleagues found that the prime of the fruit associated with the 60-point gain in the “risky door” condition (grapes) caused participants, as expected, to become substantially more risk seeking compared to the non-primed trials. So much so in fact, that they actually picked the risky option on average. The preferred option was the risky one! The prime of the 80-point fruit (watermelon) didn’t even cause as much of an increase in risk seeking as the grapes did! It is interesting, and somewhat unexpected however that the 20-point prime (strawberry) did not cause any kind of change in risk sensitivity—perhaps when making decisions people are inherently inclined to think first of potential losses, and so are essentially priming themselves in a way. With this reasoning, the strawberry prime would do nothing to alter their line of reasoning or their resulting decision.

It really just goes to show, the past is important. Where we’ve been and what we’ve done matters more than we may think. Whether we are aware of it or not, we hold in our memories the outcomes of our actions and our decisions and those memories can heavily influence our future endeavors. So, keep all of that in mind the next time you place that high stakes bet with one of your friends, feeling oh so confident because of that one time last year when you won that other bet. Save your money, please.

Ludvig, E. A., Madan, C. R., & Spetch, M. L. (2015). Priming memories of past wins induces risk seeking. Journal Of Experimental Psychology: General144(1), 24-29. doi:10.1037/xge0000046

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