Decision making under risk: Risk preference, monetary goals and information search

Nomothetic models of decision making under risk focus on the average behavior of individuals. However, a significant group of individualsʹ behavior is not consistent with these models. The study of individual differences in decision making has generally been restricted to the choices made by individuals, largely ignoring individual differences in decision-making processes. The effects of an individual-difference variable, risk preference, and a situational variable, monetary goal, on information search were evaluated in decision making contexts involving risk. Subjects differing in risk preference searched matrices containing information about monetary gambles varying in likelihood of payoff and goal value. The risk-preference groups differed most in information search for the riskiest information in the no goal condition, where risk-seeking individuals spent more time searching riskier information. Both risk groups searched the safest information more than any other information for all goal levels. The findings indicate that there are individual differences in information search patterns and suggest that some of the inconsistencies between observed decision behavior and predictions of nomothetic decision models result because those models do not adequately address individual-difference and situational variables.