A Cognitive Approach to Context Effects on Individual Decision Making Under Risk

Abstract This chapter compares and contrasts various approaches to understanding human decision making under risk, and is trying to formulate requirements for a cognitive economics theory of risky decision making. Then a first attempt is made to put forward such a theory by proposing a cognitive model JUDGEMAP based on the general cognitive architecture DUAL. This allows the model to be integrated with other cognitive processes such as perception, analogical reasoning, spreading activation memory retrieval, etc. The fact that all processes in DUAL are based on local computations and parallel processing allows for modelling the interplay between various cognitive processes during the decision-making process, in particular the model predicts that the unconscious and automatic process of spreading activation will influence the conscious process of argument building and comparison. This prediction is tested and confirmed by a psychological experiment that demonstrates that seemingly remote and irrelevant aspects of the environment can change the decision we make.

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