Essays in decision making

The dissertation consists of three essays exploring different aspects of decision making. Essay 1 presents a Dual System Model (DSM) of decision making under risk and uncertainty where the value of a gamble is a combination of the values assigned to it independently by the affective and deliberative systems of thought. Motivated by research on dual process theories and empirical research in Hsee and Rottenstreich (2004) and Rottenstreich and Hsee (2001) among others, DSM incorporates 1) individual differences in thinking dispositions; 2) affective nature of outcomes; and 3) different task construals within its framework. The model has good descriptive validity and is also used to make several novel predictions of human behavior.;Essay 2 presents a context dependent valuation (CDV) model of decision making under risk where the valuation of a gamble depends not only on its own probability-outcome structure but also on the other gambles with which it is compared. This descriptive model draws motivation from the range-frequency theory concerned with the judgment of categories like "good" and "bad" and "large" and "small" and states that the subjective value of a stimulus depends on its position as well as its rank in the set of observed stimuli. CDV accounts for a wide variety of empirical phenomena and also raises the possibility that some of the probability weighting observed in the literature may be context driven.;In the third essay, individual differences in five types of expected utility (EU) violations are investigated using thinking orientation (rational versus experiential) as the predictor variable. The effect on choice performance of priming one thinking system or the other is also explored. The key findings are: (a) EU violations are independent of rational thinking but reduce on priming it; (b) experiential thinking correlates positively with overweighting of small probabilities and negatively with ambiguity aversion and priming it improves EU performance; (c) greater deliberation does not lead to lower violations; and (d) men are more rationally oriented while women are more experientially oriented, women violate EU more than men, and both show maximum improvement when primed on their dominant thinking orientations.