INTEGRATION AND SEGREGATION OF PRIOR OUTCOMES IN RISKY DECISIONS

Two experiments were conducted to test if a prior outcome influences t he likelihood to accept a current gamble. Undergraduate students parti cipating as subjects imagined that they on a fictitious betting day at a horse-race track did not gamble in the prior race, that they gamble d and won, or that they gambled and lost. Subjects rated in one sessio n the likelihood of gambling in the current race. In another session t hey rated how satisfied they would be with not gambling, with winning, and with losing, respectively. The results of Experiment 1 showed tha t as compared to no prior outcome the ratings of likelihood of gamblin g increased after a gain and decreased after a loss. This was explaine d by the assumption, supported by the ratings of satisfaction, that th e prior outcome only affected the satisfaction with the expected loss of the current choice, making it less negative after a gain and more n egative after a loss. These results were replicated in Experiment 2. I n addition, if subjects did not know with certainty the outcome of a p revious choice to gamble, the liklihood to accept the current gamble a nd the ratings of the satisfaction with its expected outcomes were lar gely unaffected.