Adaptive Learning and Risk Taking
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| Title: | Adaptive Learning and Risk Taking |
|---|---|
| Language: | English |
| Authors: | Denrell, Jerker |
| Source: | Psychological Review. Jan 2007 114(1):177-187. |
| Availability: | American Psychological Association. Journals Department, 750 First Street NE, Washington, DC 20002-4242. Tel: 800-374-2721; Tel: 202-336-5510; Fax: 202-336-5502; e-mail: order@apa.org; Web site: http://www.apa.org/publications |
| Peer Reviewed: | Y |
| Page Count: | 11 |
| Publication Date: | 2007 |
| Document Type: | Journal Articles Reports - Evaluative |
| Descriptors: | Sampling, Decision Making, Risk, Models, Rewards, Influences, Learning Processes, Expectation |
| ISSN: | 0033-295X |
| Abstract: | Humans and animals learn from experience by reducing the probability of sampling alternatives with poor past outcomes. Using simulations, J. G. March (1996) illustrated how such adaptive sampling could lead to risk-averse as well as risk-seeking behavior. In this article, the author develops a formal theory of how adaptive sampling influences risk taking. He shows that a risk-neutral decision maker may learn to prefer a sure thing to an uncertain alternative with identical expected value and a symmetric distribution, even if the decision maker follows an optimal policy of learning. If the distribution of the uncertain alternative is negatively skewed, risk-seeking behavior can emerge. Consistent with recent experiments, the model implies that information about foregone payoffs increases risk taking. |
| Abstractor: | Author |
| Entry Date: | 2007 |
| Access URL: | https://content.apa.org/journals/rev/114/1/177 |
| Accession Number: | EJ752159 |
| Database: | ERIC |
| Abstract: | Humans and animals learn from experience by reducing the probability of sampling alternatives with poor past outcomes. Using simulations, J. G. March (1996) illustrated how such adaptive sampling could lead to risk-averse as well as risk-seeking behavior. In this article, the author develops a formal theory of how adaptive sampling influences risk taking. He shows that a risk-neutral decision maker may learn to prefer a sure thing to an uncertain alternative with identical expected value and a symmetric distribution, even if the decision maker follows an optimal policy of learning. If the distribution of the uncertain alternative is negatively skewed, risk-seeking behavior can emerge. Consistent with recent experiments, the model implies that information about foregone payoffs increases risk taking. |
|---|---|
| ISSN: | 0033-295X |
