A Comparative Study Of Risk Decision In Listening And Empirical Paradigm

The research of risk decision has a long history which can be traced back to the mid-17th century. Nowdays researchers generally thought that risk decision-making can be divided into two camps:the rational decision-making and the limitited rational decision-making. The development of rational decision-making theory can be divided into two phases:the expected value theory and the expected utility theory; the limited rational decision-making thoery was put forward by Simon in the1950s, under the guidance of this theory, there have been a series of risk decision-making model: Kahneman and Tversky prospect theory、Lopes’ security-potential/aspiration theory^Priority heuristic theory、Shu Li’s Equate-to-differentiate theory.Over the last decade, there was a great breakthrough in the paradigms of risk decision-making. The traditional risk decision-making paradigms (decisions from description) present the decision-making problems to the decision-maker in the form of a summary description, the outcomes of each option and their probabilities are conveyed numerically. On the basis of understanding all possible outcomes and its probability, the subjects make one choice. There are a lot of limitations of traditional paradigms’ explaination of the real world, because in real life outside the lab, people often do not know what will happen、possible outcomes and their probabilities. They can make the decision only base on their own experience:what happened and what outcomes were in the same situation. However, the new experimental paradigm (decision from experience) can simulate this decision situation well.There are still some limitations in the ast experience paradigm, the purpose of this study is to further improve the experience paradigm, and find out that whether the overweightion of rare event、the reflection effect and the framing effect exist in experience paradigm, and whether the prospect theory and equate-to-differentiate theory can explain there phenomenon.The results of this study show that:(1) overweightion of rare event、the reflection effect and the framing effect exist in the description paradigm, which are consistent with previous empirical researchs and the prediction of prospect theory and equate-to-differentiate theory.(2) The framing effect exists, while overweightion of rare event and the reflection effect does not exist in the experience paradigm.