Irrational decisions: attending to numbers rather than ratios

When judging the probability of a low probability event, many people judge it as less likely when it is expressed as a ratio of small numbers (e.g. 1:10) than of large numbers (e.g. 10:100). This is known as the ratio-bias (RB) phenomenon. Besides confirming the phenomenon, in this experiment participants made irrational decisions selecting probabilities of 10% in preference to 20 and 30%, in spite of the great discrepancy of probabilities between options (greater than in previous studies). These results support an interpretation in terms of the principles of cognitive-experiential self-theory (CEST). Relation between tendency to present the RB phenomenon and degree of rationality (as measured by the Need for Cognition Scale) was also examined. Scores in rationality obtained by participants who chose the nonoptimal response were lower than scores of participants who chose the optimal response.

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