A Tri-Reference Point Theory of Decision Making under Risk

Autor/inn/en	Wang, X. T.; Johnson, Joseph G.
Titel	A Tri-Reference Point Theory of Decision Making under Risk
Quelle	In: Journal of Experimental Psychology: General, 141 (2012) 4, S.743-756 (14 Seiten) PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0096-3445
DOI	10.1037/a0027415
Schlagwörter	Decision Making; Remedial Mathematics; Risk; Theories; Goal Orientation; Success; Mathematical Formulas; Testing; Failure; Task Analysis; Preferences; Organizational Objectives + Suchen Sie Ihr Suchwort? Decision-making; Entscheidungsfindung; Risiko; Theory; Theorie; Zielorientierung; Zielvorstellung; Erfolg; Mathematische Formel; Testdurchführung; Testen; Aufgabenanalyse; Business goal; Unternehmensziel
Abstract	The tri-reference point (TRP) theory takes into account minimum requirements (MR), the status quo (SQ), and goals (G) in decision making under risk. The 3 reference points demarcate risky outcomes and risk perception into 4 functional regions: success (expected value of x greater than or equal to G), gain (SQ less than x less than G), loss (MR less than or equal to x less than SQ), and failure (x less than MR). The psychological impact of achieving or failing to achieve these reference points is rank ordered as MR greater than G greater than SQ. We present TRP assumptions and value functions and a mathematical formalization of the theory. We conducted empirical tests of crucial TRP predictions using both explicit and implicit reference points. We show that decision makers consider both G and MR and give greater weight to MR than G, indicating failure aversion (i.e., the disutility of a failure is greater than the utility of a success in the same task) in addition to loss aversion (i.e., the disutility of a loss is greater than the utility of the same amount of gain). Captured by a double-S shaped value function with 3 inflection points, risk preferences switched between risk seeking and risk aversion when the distribution of a gamble straddled a different reference point. The existence of MR (not G) significantly shifted choice preference toward risk aversion even when the outcome distribution of a gamble was well above the MR. Single reference point based models such as prospect theory cannot consistently account for these findings. The TRP theory provides simple guidelines for evaluating risky choices for individuals and organizational management. (Contains 6 figures, 6 tables and 7 footnotes.) (As Provided).
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Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2017/4/10