Explaining heterogenity in utility functions by individual differences in decision modes

Schunk, Daniel ; Betsch, Cornelia

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URL: http://ub-madoc.bib.uni-mannheim.de/1267
URN: urn:nbn:de:bsz:180-madoc-12679
Document Type: Working paper
Year of publication: 2005
The title of a journal, publication series: None
Publication language: English
Institution: School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series: Veröffentlichungen des MEA (Mannheim Research Institute For the Economics of Aging) > MEA Discussion Papers
Subject: 300 Social sciences, sociology, anthropology
Classification: JEL: C91 D81 ,
Subject headings (SWD): Intuition , Entscheidung bei Risiko , Individualität
Abstract: The curvature of utility varies between people. We suggest that there is a relationship between individual differences in preferred decision mode (intuition vs. deliberation) and the curvature of the individual utility function. If a person habitually prefers a deliberative mode, the utility function should be nearly linear, while it should be curved when a person prefers the intuitive mode. In this study the utility functions of the subjects were assessed using a lottery-based elicitation method and related to a measurement of the habitual mode preference for intuition and deliberation. Results confirm that people who prefer the deliberative mode have a utility function that is more linear than for people who prefer the intuitive mode. Our findings indicate a stronger affective bias of subjective values in intuitive than deliberate decision makers. While deliberative decision makers may have rather used the stated values, intuitive decision makers may have additionally integrated affective reactions towards the stimuli into the decision.
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