Risk aversion in risk‐taking tasks: Combined effects of feedback attributes and cognitive reflection ability

Abstract

AbstractIntroductionFeedback on human choices is important because it can affect risk‐taking and rationality in subsequent decisions. In daily life, choices are not always followed by immediate outcomes nor are they always followed by simple, single‐dimensional feedback. Here, we seek to extend previous studies on the effects of feedback on subsequent risk‐taking in three experiments.MethodsWe examine whether (1) the effect of feedback immediacy on participants’ risk‐taking exists in tasks containing explicit probabilistic outcome values; (2) increasing feedback dimensionality from one dimension (only about the outcome) to include a second dimension (also about the “rationality” of prior choices) increases feedback effects on risk‐taking; and (3) cognitive reflection ability moderates feedback effects on risk‐taking.ResultsResults showed that feedback reduced risk‐taking in tasks containing explicit probabilistic outcomes (Studies 1 and 2). They further showed that two‐dimensional feedback produces a stronger reduction in risk‐taking compared to single‐dimensional feedback (Study 3). Lastly, results suggested that cognitive reflection ability moderates the effects of feedback on risk‐taking (Study 4).ConclusionTaken together, the findings extended the understanding of risk‐taking and mitigating mechanisms and pave the way for intervention studies aimed at changing risky behaviors.