Traditionally, decision-making has been depicted as a logical process wherein individuals weigh the potential risks and strive to optimise outcomes. Yet, human cognition often diverges from purely rational pathways, especially in scenarios necessitating swift responses. Sometimes, individuals erroneously select suboptimal alternatives, swayed by how these choices are framed within specific contexts.
Take the example of an investor confronted with the chance to acquire a share portfolio boasting a 60% likelihood of profit. They would likely seize this opportunity. Conversely, if the scenario is reframed to highlight a 40% risk of loss, the same investor might reject the deal. This phenomenon also extends to visual perceptions, such as two identical circles varying in size based on their surrounding shapes. The contextual presentation guides our evaluation of the choices before us.
This intrigue over whether context invariably influences decision-making or if rationality fluctuates with socio-economic and cultural backgrounds—like country of origin, social status, or religious and political affiliations—sparked a comprehensive study. A team of international researchers from the HSE Institute for Cognitive Neuroscience, among others, embarked on this investigative journey. They recruited volunteers from diverse countries, including Russia, France, Argentina, India, and China, culminating in over 500 participants from various cultural and economic environments.
The research unfolded in two distinct phases. Initially, participants were tasked with choosing between two options repeatedly across multiple rounds, each associated with either a potential gain or a potential loss. This setup allowed the options to be framed in contexts that appeared more or less beneficial based on previous outcomes, thereby testing the participants’ ability to maximise their returns through experiential learning. Remarkably, the findings indicated that all participants, regardless of nationality, often made choices that needed to align with optimal decision-making. They misjudged the presented options due to the contexts in which they were framed.
A second phase of the experiment was introduced to further probe the reproducibility of these context-driven outcomes. Participants faced similar choices set in identical contexts but with explicit variable information. For example, they could opt for a significant but uncertain reward with a 50% probability or a smaller, guaranteed reward. By repeatedly offering such choices, researchers aimed to pinpoint the threshold at which individuals switch from risk-taking to opting for security. This threshold significantly varied among participants and appeared influenced by cultural contexts. Results revealed distinct national tendencies: while Russians showed moderate risk preferences, Chinese and Japanese participants were more inclined to embrace risk, whereas individuals from India and Chile exhibited greater risk aversion.
The study’s co-author, Oksana Zinchenko, a Senior Research Fellow at the Institute for Cognitive Neuroscience at HSE University, highlighted a pivotal insight from the research. The conventional belief that risk propensity is the dominant influencer of decision-making was challenged. Instead, their findings suggest that our decisions are primarily shaped by how information is presented—whether we experience situations directly or learn about them second-hand. This underscores a cognitive limitation in human consciousness. This limitation transcends individual beliefs, attitudes, or national identities, pointing to a universal characteristic of how humans process information and make decisions.
More information: Hernán Anlló et al, Comparing experience- and description-based economic preferences across 11 countries, Nature Human Behaviour. DOI: 10.1038/s41562-024-01894-9
Journal information: Nature Human Behaviour Provided by National Research University Higher School of Economics