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Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
Published on: September 19, 2012
Surprises: low probabilities or high contrasts?
Karl Halvor Teigen1, Gideon Keren
1Department of Psychology, University of Oslo, P.O.B. 1094 Blindern, N-0317, Oslo, Norway. k.h.teigen@psykologi.uio.no
Abstract:
Outcome expectations can be expressed prospectively in terms of probability estimates, and retrospectively in terms of surprise. Surprise ratings and probability estimates differ, however, in some important ways. Surprises are generally created by low-probability outcomes, yet, as shown by several experiments, not all low-probability outcomes are equally surprising. To account for surprise, we propose a contrast hypothesis according to which the level of surprise associated with an outcome is mainly determined by the extent to which it contrasts with the default, expected alternative. Three ways by which contrasts can be established are explored: contrasts due to relative probabilities, where the obtained outcome is less likely than a default alternative; contrasts formed by novelty and change, where a contrast exists between the obtained outcome and the individual's previous experience; and contrasts due to the perceptual or conceptual distance between the expected and the obtained. In all these cases, greater contrast was accompanied by higher ratings of surprise.
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