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Context-dependent effects of branches in decisions under risk
1ESADE, Universitat Ramon Llull, Spain.
Cognition
|January 31, 2026
Summary
Decision makers favor prospects with more branches when choosing between options. This "branch effect" depends on context, influencing financial and policy decisions under uncertainty.
Area of Science:
- Decision Science
- Behavioral Economics
- Cognitive Psychology
Background:
- Understanding how individuals make choices under uncertainty is crucial.
- Existing models of risky choice do not fully account for the structural features of prospects.
Purpose of the Study:
- To investigate the influence of the number of branches in a prospect on decision-maker preferences.
- To determine if branch number serves as a heuristic for choice justification.
- To examine the context-dependent nature of this effect.
Main Methods:
- Experimental design presenting decision-makers with choices between prospects with varying branch numbers.
- Analysis of preference shifts based on the number of gain/loss branches and alternative options.
- Examination of moderators and extension to losses and life valuations.
Main Results:
- Preference for a prospect increases with more gain branches compared to an alternative.
- This effect is context-dependent, disappearing with sure gains and reversing in isolation.
- Diminishing sensitivity observed: two branches are significantly more attractive than one, but further branches offer little additional benefit.
Conclusions:
- The number of branches in a prospect significantly influences choice, acting as a contextual heuristic.
- Findings challenge existing models of risky choice, highlighting the importance of prospect structure.
- Results have practical implications for financial, policy, and ethical decisions under uncertainty.
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