Boundary Conditions for the Positive Skew Bias.

Area of Science:

• Decision Science
• Behavioral Economics
• Risk Perception

Background:

• Positively skewed gambles, characterized by large potential gains and small likely losses, are often preferred.
• This preference, known as positive-skew bias, influences decision-making under uncertainty.

Purpose of the Study:

• To investigate the conditions influencing preference for positively skewed gambles over symmetric gambles.
• To examine the role of skewness strength and outcome valence in this bias.

Main Methods:

• Two online studies (N=209, N=210) involving healthy adult participants across a wide age range (22-85).
• Participants made choices between positively skewed gambles and either certain outcomes or symmetric gambles.
• Logistic regression analyses were used to model choice probabilities.

Main Results:

• Participants favored moderately and strongly skewed gambles over certain outcomes, unless large losses were involved.
• Increased skewness did not consistently increase preference for skewed over symmetric gambles.
• Preference for skewed gambles was most pronounced for positive expected values and depended on the alternative gamble presented.

Conclusions:

• Preference for positively skewed gambles is nuanced, depending on the gamble's structure and the alternative choice.
• Skewness strength and outcome valence significantly moderate this bias.
• Contrary to prior research, age-related increases in positive-skew bias were not strongly evident; decision strategies and cognitive abilities may be more influential.