The effect of sampling strategies in decision from experience

This paper concentrates on the relation between information search and weighting of rare events in decision from experience. Previous research found a consistent description-experience gap in weighting of rare events, as people overweight rare events when facing description-based decisions and underweight rare events when facing experience-based decisions. Using Erev et al. (2010) database, I identify two search strategies drawn from Bayesian decision theory: Pascal strategy and binomial strategy. In choices made after Pascal strategy, where the decision to stop searching is conditioned on the encountering of r rare events, subjects over-weight rare events more than in choices made after binomial strategy, where the decision to stop searching is unaffected by the number of rare events encountered. Splitting choices in Pascal/binomial is a way of interpreting the search process. Another way is dividing subjects into avid and frugal searchers (Hertwig & Pleskac 2010). Making a synthesis of those two ways of interpreting the search process could shed light on the link between information search and the description-experience gap.