Decisions from Experience = Sampling Error + Prospect Theory: Reconsidering Hertwig, Barron, Weber & Erev
Craig Fox and Liat Hadar reanalyse the data of Hertwig, Barron, Weber and Erev (2004) and add a replication with 46 students. They separate three possible sources of the apparent reversal of overweighting in decisions from experience: sampling error, judgment bias in estimating experienced probabilities, and the weighting of judged probabilities. They find that choices fit prospect theory far better when it is applied to the probabilities participants actually experienced than to the stated ones, and conclude that the reversal is almost entirely due to sampling error. The results are consistent with prospect theory and with the two-stage model of decision under uncertainty, and the authors call the claim that two theories are needed premature.
Craig Fox and Liat Hadar reanalyse the data of Hertwig, Barron, Weber and Erev (2004) and add a replication with 46 students. They separate three possible sources of the apparent reversal of overweighting in decisions from experience: sampling error, judgment bias in estimating experienced probabilities, and the weighting of judged probabilities. They find that choices fit prospect theory far better when it is applied to the probabilities participants actually experienced than to the stated ones, and conclude that the reversal is almost entirely due to sampling error. The results are consistent with prospect theory and with the two-stage model of decision under uncertainty, and the authors call the claim that two theories are needed premature.
Written from the full text read 2026-10-22 from Cambridge Core and the journal.
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(2004).' Judgment and Decision Making, 1(2), 159-161. doi:10.1017/S1930297500002370.