Citation

Kogler C, Kühberger A. J. Risk Uncertain. 2007; 34(2): 145-154.

Affiliation

Salzburg University, Dept Psychology, A-5020 Salzburg, Austria

Copyright

(Copyright © 2007, Holtzbrinck Springer Nature Publishing Group)

DOI

10.1007/s11166-007-9008-7

PMID

unavailable

Abstract

The diversification bias in repeated lotteries is the finding that a majority of participants fail to select the option offering the highest probability. This phenomenon is systematic and immune to classical manipulations (e.g. monetary rewards). We apply dual process theories and argue that the diversification bias is a consequence of System 1 (automatic, intuitive, associative) triggering a matching response, which fails to be corrected by System 2 (intentional, analytic, rational). Empirically, supporting the corrective functions of System 2 through appropriate contextual cues (describing the task as a statistical test rather than as a lottery) led to a decrease of diversification.

Language: en