Innumeracy and incentives: A ratio bias experiment
This paper tests the ratio bias, the tendency to choose the option with more potential successes even when its probability of success is lower. The authors had participants choose repeatedly between a small urn and a large one under several payment conditions, from no incentive to a few cents for each red marble drawn, plus a fixed-payment control. They confirm that the bias exists and separate it from general random error. The abstract reports that a monetary incentive significantly reduces irrational choices. The detailed tests show the gain in the within-subject comparison but not in the between-subject ones, and the bias declined over the rounds even though overall accuracy did not change.
This paper tests the ratio bias, the tendency to choose the option with more potential successes even when its probability of success is lower. The authors had participants choose repeatedly between a small urn and a large one under several payment conditions, from no incentive to a few cents for each red marble drawn, plus a fixed-payment control. They confirm that the bias exists and separate it from general random error. The abstract reports that a monetary incentive significantly reduces irrational choices. The detailed tests show the gain in the within-subject comparison but not in the between-subject ones, and the bias declined over the rounds even though overall accuracy did not change.
Written from the abstract, Cambridge Core.
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Dale, D., Rudski, J., Schwarz, A., & Smith, E. (2007). Innumeracy and incentives: A ratio bias experiment. Judgment and Decision Making, 2(4), 243-250