Effects of different feedback types on information integration in repeated monetary gambles

Most models of risky decision making assume that all relevant information is taken into account (e.g., von Neumann and Morgenstern, 1944; Kahneman and Tversky, 1979). However, there are also some models supposing that only part of the information is considered (e.g., Brandstätter et al., 2006; Gigerenzer and Gaissmaier, 2011). To further investigate the amount of information that is usually used for decision making, and how the use depends on feedback, we conducted a series of three experiments in which participants choose between two lotteries and where no feedback, outcome feedback, and error feedback was provided, respectively. The results show that without feedback participants mostly chose the lottery with the higher winning probability, and largely ignored the potential gains. The same results occurred when the outcome of each decision was fed back. Only after presenting error feedback (i.e., signaling whether a choice was optimal or not), participants considered probabilities as well as gains, resulting in more optimal choices. We propose that outcome feedback was ineffective, because of its probabilistic and ambiguous nature. Participants improve information integration only if provided with a consistent and deterministic signal such as error feedback.