Acta Psychologica Sinica

Abstract

Various researches showed that the magnitude of the outcome could affect risk preference in decision making, which was inconsistent with the common phenomenon of risk aversion in gain. Weber (2005) investigated this effect, but three points of their study were needed to be further discussed. First, the magnitude of the value was still in a narrow range; second, a lot of researches didn’t showed the effect in loss condition by choice response paradigm, but it was not discussed very well; third, the mechanism underlying this effect had not been discussed perfectly up to now. So the current research tested the magnitude of outcome effect in a wider range of value and choice response conditions respectively. What’s more, the underlying mechanism of the effect was discussed in an equate-to-differentiate way, and some problems about the equate-to-differentiate model itself were also discussed.

Two experiments were conducted in the current research, chi square; phi and phi square were used for the data analyses. The first experiment included four conditions: risky gain vs. sure gain, risky gain vs. riskier gain, risky loss vs. sure loss and risky loss vs. riskier loss. Each condition included four tasks that had the same risking probability and different magnitude of the value. The magnitude of the value in all tasks varied from 1 Yuan to 100000000 Yuan. 135 undergraduate students participated in all of the four conditions of this experiment, but they only finished tasks with a different kind of value in each condition. After they finished each task, the subjects were asked to finish a traditional judgment task which was designed to test for whether the equate-to-differentiate model could give an interpretation to the magnitude of outcome effect or not. The second study was almost as the same as the first experiment. The only difference between them was that, a new judgment task was designed for the equate-to-differentiate model in the second study. 123 undergraduate students took part in the second experiment.

The results of the two experiments showed that: (1) In both of the gain conditions, more than 50% of the subjects preferred the riskier gamble when the magnitude of the value was small, but their preferences were reversal when the magnitude of the value was big enough; (2) In both of the loss conditions, more than 50% of the subjects preferred the riskier gamble in all task; (3) There were no significant relationships between typical judgments task’s prediction and the subjects’ selections; (4) Significant relationships were found between the new judgment task’s prediction and the subjects’ selections under both gain condition and risky loss vs. sure loss condition.

We could conclude the following points based on the current results: (1) The magnitude of outcome effect was not present in loss domain, but present in gain domain by choice response paradigm; (2) Only one preference reversal point was found in the wide range of the outcome value; (3) The magnitude of outcome effect could be interpreted by the equate-to-differentiate model perfectly; (4) the traditional judgment task of the equate-to-differentiate model should be revised.

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