Unrealistic optimism and decision making

Abstract

One of the leading descriptive theories of decision-making under risk, Tversky & Kahneman's Prospect theory, reveals that normative explanation of decisionmaking, based only on principle of maximizing outcomes expected utility, is unsustainable. It also underlines the effect of alternative factors on decision-making. Framing effect relates to an influence that verbal formulation of outcomes has on choosing between certain and risky outcomes; in negative frame people tend to be risk seeking, whereas in positive frame people express risk averse tendencies. Individual decisions are not based on objective probabilities of outcomes, but on subjective probabilities that depend on outcome desirability. Unrealistically pessimistic subjects assign lower probabilities (than the group average) to the desired outcomes, while unrealistically optimistic subjects assign higher probabilities (than the group average) to the desired outcomes. Experiment was conducted in order to test the presumption that there's a relation between unrealistic optimism and decision-making under risk. We expected optimists to be risk seeking, and pessimist to be risk averse. We also expected such cognitive tendencies, if they should become manifest, to be framing effect resistant. Unrealistic optimism scale was applied, followed by the questionnaire composed of tasks of decision-making under risk. Results within the whole sample, and results of afterwards extracted groups of pessimists and optimists both revealed dominant risk seeking tendency that is resistant to the influence of subjective probabilities as well as to the influence of frame in which the outcome is presented.Jedna od vodecih deskriptivnih teorija odlucivanja u uslovima rizika, teorija izgleda Tverskog i Kanemana, otkriva neodrzivost normativnog objasnjenja donosenja odluke samo na osnovu principa maksimizacije ocekivane korisnosti ishoda i istice uticaj alternativnih faktora na donosenje odluka. Efekat okvira odnosi se na uticaj jezicke formulacije ishoda na opredeljenje izmedju sigurne i rizicne mogucnosti, u negativnom okviru ljudi su skloni riziku, dok ga u pozitivnom izbegavaju. Individualne odluke nisu vodjene objektivnim verovatnocama ishoda, vec subjektivnim verovatnocama koje zavise od pozeljnosti tih ishoda. Nerealisticno pesimisticni ispitanici dodeljuju manje verovatnoce (u odnosu na grupni prosek) pozeljnim ishodima, dok nerealisticno optimisticni ispitanici dodeljuju vece verovatnoce (u odnosu na grupni prosek) pozeljnim ishodima. Istrazivanje je izvedeno sa ciljem da se proveri pretpostavka o povezanosti nerealisticnog optimizma i donosenja odluka u uslovima rizika. Ocekivali smo da ce optimisti biti skloniji riziku, a da ce pesimisti izbegavati rizik, kao i da ce ukoliko se ispolje, ovakve kognitivne tendencije biti otporne na efekat okvira. Primenjena je skala nerealisticnog optimizma i upitnik sa zadacima donosenja odluka u uslovima rizika. Rezultati ukupnog uzorka i naknadno izdvojenih grupa pesimista i optimista pokazali su da na svim nivoima obrade dominira sklonost ka riziku koja je otporna na uticaj subjektivnih verovatnoca i okvira u kom je ishod prikazan.