Quispe-Torreblanca, E. orcid.org/0000-0002-0974-0705, Stewart, N. and Birnbaum, M.H. (2025) Surprisingly robust violations of stochastic dominance despite splitting training: A quasi-adversarial collaboration. Judgment and Decision Making, 20. e4. ISSN 1930-2975
Abstract
First-order stochastic dominance is a core principle in rational decision-making. If lottery A has a higher or equal chance of winning an amount or more compared to lottery B for all x, and a strictly higher chance for at least one , then A should be preferred over B. Previous research suggests that violations of this principle may result from failures in recognizing coalescing equivalence. In Expected Utility Theory (EUT) and Cumulative Prospect Theory (CPT), gambles are represented as probability distributions, where probabilities of equivalent events can be combined, ensuring stochastic dominance. In contrast, the Transfer of Attention Exchange (TAX) model represents gambles as trees with branches for each probability and outcome, making it possible for coalescing and stochastic dominance violations to occur. We conducted two experiments designed to train participants in identifying dominance by splitting coalesced gambles. By toggling between displays of coalesced and split forms of the same choice problem, participants were instructed to recognize stochastic dominance. Despite this training, violations of stochastic dominance were only minimally reduced, as if people find it difficult—or even resist—shifting from a trees-with-branches representation (as in the TAX model) to a cognitive recognition of the equivalence among different representations of the same choice problem.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © The Author(s), 2025. Published by Cambridge University Press on behalf of Society for Judgment and Decision Making and European Association for Decision Making. This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (https://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited. |
Keywords: | stochastic dominance; splitting training; dominance training |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Analytics, Technology & Ops Department |
Depositing User: | Symplectic Publications |
Date Deposited: | 25 Nov 2024 10:45 |
Last Modified: | 30 Jan 2025 16:04 |
Status: | Published |
Publisher: | Cambridge University Press |
Identification Number: | 10.1017/jdm.2024.40 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:220013 |