PREFERENCE FOR DIFFERENT SEQUENCES OF INCREASING OR DECREASING REWARDS

Preference for different increasing (or decreasing) sequences of rewar ds has been found to depend both on the magnitude of increase or decre ase from step-to-step in the sequence and on the rate of change with w hich rewards increase or decrease. This experiment examined the effect s on preference of different magnitudes and rates of change of reward. Using rewards for actual task performance, four increasing and four d ecreasing sequences were studied, each consisting of 24 rewards of var ying magnitude. Sequences differed according to four possible models o f rate change: linear, exponential, logarithmic, and step function. Pr eferences for given reward sequences obtained prior to extensive task and reward experience (decision utility) were not closely related to p references after such experience (predicted utility). In the increasin g reward sequences, subjects preferred the step sequence (with its sin gle large increase at the end) prior to experience, but after experien ce they preferred the exponential, linear, and logarithmic sequences w hich entailed continuous reward-to-reward improvement throughout the s equence. In the decreasing sequences, subjects were less definite in t heir preferences. Prior to experience they most preferred the logarith mic sequence with its decelerating decline in magnitude of rewards, wh ile after experience they least preferred the step function, with its huge loss at the end of the sequence. (C) 1996 Academic Press, Inc.