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Explaining heterogeneity in utility functions by individual differences in decision modes

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  • Schunk, Daniel
  • Betsch, Cornelia

Abstract

The curvature of utility functions varies between people. We suggest that there is a relationship between individual differences in preferred decision mode (intuition vs. deliberation) and the curvature of the individual utility function. If a person habitually prefers a deliberative mode, the utility function should be nearly linear, while it should be curved when a person prefers the intuitive mode. In this study the utility functions of the subjects were assessed using a lottery-based elicitation method and related to a measurement of the habitual mode preference for intuition and deliberation. Results confirm that people who prefer the deliberative mode have a utility function that is more linear than for people who prefer the intuitive mode. Our findings indicate a stronger affective bias of subjective values in intuitive than deliberate decision makers. While deliberative decision makers may have rather used the stated values, intuitive decision makers may have additionally integrated affective reactions towards the stimuli into the decision.
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  • Schunk, Daniel & Betsch, Cornelia, 2006. "Explaining heterogeneity in utility functions by individual differences in decision modes," Journal of Economic Psychology, Elsevier, vol. 27(3), pages 386-401, June.
    • Handle: RePEc:eee:joepsy:v:27:y:2006:i:3:p:386-401
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