Stewart, N. (2009). Decision by sampling: The role of the
decision environment in risky choice. Quarterly Journal of Experimental
Psychology, 62, 1041-1062.
Decision by sampling (DbS) is a theory about how our environment shapes
the decisions that we make. Here, I review the application of DbS to risky
decision making. According to classical theories of risky decision making,
people make stable transformations between outcomes and probabilities and
their subjective counterparts using fixed psychoeconomic functions. DbS
offers a quite different account. In DbS, the subjective value of an outcome
or probability is derived from a series of binary, ordinal comparisons with
a sample of other outcomes or probabilities from the decision environment.
In this way, the distribution of attribute values in the environment
determines the subjective valuations of outcomes and probabilities. I show
how DbS interacts with the real-world distributions of gains, losses, and
probabilities to produce the classical psychoeconomic functions. I extend
DbS to account for preferences in benchmark data sets. Finally, in a
challenge to the classical notion of stable subjective valuations, I review
evidence that manipulating the distribution of attribute values in the
environment changes our subjective valuations just as DbS predicts.
This paper is an account of the Fifteenth Experimental
Psychology Society Prize Lecture given in January 2008.