A Re-Examination of Probability Matching and Rational Choice

David R. Shanks*, Richard J. Tunney, John D. McCarthy

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

In a typical probability learning task participants are presented with a repeated choice between two response alternatives, one of which has a higher payoff probability than the other. Rational choice theory requires that participants should eventually allocate all their responses to the high-payoff alternative, but previous research has found that people fail to maximize their payoffs. Instead, it is commonly observed that people match their response probabilities to the payoff probabilities. We report three experiments on this choice anomaly using a simple probability learning task in which participants were provided with (i) large financial incentives, (ii) meaningful and regular feedback, and (iii) extensive training. In each experiment large proportions of participants adopted the optimal response strategy and all three of the factors mentioned above contributed to this. The results are supportive of rational choice theory.

Original languageEnglish
Pages (from-to)233-250
Number of pages18
JournalJournal of Behavioral Decision Making
Volume15
Issue number3
DOIs
Publication statusPublished - 1 Jan 2002

Keywords

  • Choice
  • Feedback
  • Learning
  • Maximization
  • Payoffs
  • Probability matching
  • Rationality
  • Reinforcement

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