Predicting an Outcome Less Probable yet More Desirable than the Other

Abstract

Extant research suggests that the desirability of an outcome influences the way an individual makes a prediction. The current research investigated how an outcome's desirability influences the extent to which an individual evaluates its probability when making a prediction. Two studies were conducted using a single binary prediction based on the urn model. Individuals predicted which color-red or blue-a ball drawn from a bag would be, while being aware of the proportion of each color in the bag. The results of the first study indicated that individuals predicted the more probable outcome regardless of the probabilities of two outcomes. However, when the less probable outcome was more desirable, the proportion of predictions became significantly correlated and better calibrated to the actual probability. This result was interpreted as showing that, when motivated to predict the more desirable but less probable outcome, individuals evaluate its probability more effortfully. This interpretation was tested in the second study. When the probabiity- matching motivation was implemented, the proportion of individuals who predicted the less probable outcome increased significantly. However, when the less probable outcome was more desirable, the same motivation did not significantly increase the proportion of such individuals. Taken together, these results imply that individuals likely process the same probability informatio differently based on whether this information is useful for predicting a desirable outcome.

Keywords: binary-choice; binary-prediction; choice-making; cognitive effort; optimistic bias; probability-matching; urn model.

Figure 1

The proportion of the individuals who predicted a red ball for each actual proportion of red balls in a bag (Conditions 1 & 2). Experimental results are plotted as dots. The horizontal axis indicates the actual proportion of the red balls in the bag. The vertical axis indicates the proportion of the individuals who predicted a red ball being drawn.

Figure 2

The proportion of the individuals who predicted a red ball for each actual proportion of red balls in a bag when drawing a red ball was more desirable (Conditions 3 & 4). Experimental results are plotted as dots. The horizontal axis indicates the actual proportion of the red balls in the bag. The vertical axis indicates the proportion of the individuals who predicted a red ball being drawn.

Figure 3

Comparisons of the prediction patterns among the four conditions based on their linear regression lines. The horizontal axis indicates the actual proportion of red balls. The vertical axis indicates the proportion of the individuals who predicted a red ball being drawn.

Table 1

A Regression Coefficient, B, and Other Descriptive Statistics of the Four Conditions

Figure 4

Four successive predictions of a red ball with the proportion of 20:80 or 30:70 (red to blue balls). The number of individuals who predicted a red ball increased toward the actual proportion as the number of previous predictions increased.

Figure 5

The effect of probability-matching on the proportion of individuals who predicted a red ball with the proportion of 20:80 or 30:70 (red to blue balls) and under Condition 1 or Condition 3.