Decisions from Experience vs Decisions from Description
“Decisions from description” and “decisions from experience” are two paradigms in the experimental study of behavioral decision making. In “decisions from description,” individuals make choices based on a provided summary or description of potential outcomes and their probabilities. This is the paradigm typically used in classical experiments involving choices between monetary gambles. In contrast, “decisions from experience” involves individuals learning about potential outcomes through repeated sampling or direct interaction with the decision environment, rather than being given a complete description upfront. The dichotomy has been emphasized primarily by Ralph Hertwig and his colleagues who point out that most research on risky choice has relied on decisions from description despite the fact that decisions from experience are arguably more common in real-world settings.
A novice doctor who has learned in medical school textbooks about some rare disease may tend to overestimate the likelihood that one of their patients has that disease without giving full attention to the extremely low probability. This corresponds to research supporting prospect theory, a highly influential model of risky decision makingDecisions can be categorized based on the amount and nature of information available and decision scientists have developed somewhat standard definitions of the terms "risk",... that uses decisions from description to elicit choices from research participants. With that method, participants tend to overweight very small probabilities.
Experienced doctors who have learned about disease probabilities from their first hand experience with patients, however, might be expected to do the opposite, rejecting out-of-hand the possibility that their patients have a very rare disease—unless they happen to be one of the few doctors who has encountered it—since in their long career they have never encountered the disease outside of textbooks. In line with that intuition, Hertwig and colleagues have found that study participants making decisions from experience tend to underweight extremely rare events, in direct contrast to the findings from prospect theory.
This distinction is highly relevant to casino gambling and to decision making in real-world domains more generally. More than in most real-world decision domains, casino gambling might seem well matched to decisions from description. Casino gambles are well defined, with choices, probabilities, possible outcomes, and payouts constrained by the casino game design. Experienced casino gamblers have often read about or been otherwise instructed about these constraints. That said, many gamblers were never formally taught those constraints and instead learned them from experience. Even those gamblers who encountered the descriptions when they first entered a casino have since learned most of what they know from direct experience playing the games. BlackjackBlackjack, also referred to as 21, is a popular casino card game where players attempt to have a hand value closer to 21 than the... More, rouletteRoulette is a popular casino table game originating from France. Players place bets on either a single number, various groupings of numbers, the colors red... More, or slot machineSlot machines, also known as a fruit machines (e.g., in the United Kingdom), pokies (e.g., in Australia), one-armed bandits, or simply slots, are games of... More players can make the same gamble over and over again hundreds or even thousands of times in a single gambling evening. They learn most of what they know from that repeated exposure. In that sense, their choices correspond far more to “decisions from experience”.
Decision Making in the Wild
There’s a further distinction to be made with “decision making in the wild,” a term that originates with the cognitive anthropologist Edwin Hutchins and his book, Cognition in the Wild, where Hutchins describes his research with US Navy ship navigation. While the first two paradigms are primarily rooted in experimentally designed scenarios, “decision making in the wild” refers to real-world decision-making contexts. In this paradigm, outcomes have tangible consequences and the decision environment is not merely a neutral backdrop designed primarily to remove additional context and control the variables of interest. Instead, the environment is intentionally designed in part for its impact on decision processes. This designed environments and the decision makers co-evolve over time, each shaping the other. Moreover, these real-world decisions are entrenched in social, cultural, and other contextual nuances, where culture-specific values, practices, and beliefs may develop around the decision-making activity in unique ways across time and locations. Thus, while “decisions from experience” in experimental settings allow individuals to learn about potential outcomes through repeated sampling, “decision making in the wild” embeds this experience in a rich tapestry of environmental design, social interaction, cultural values and beliefs, and prolonged individual and social learning. This perspective underscores the complexity and multi-dimensional nature of decisions people make in their daily lives compared to those made in controlled experimental settings.
The discussion as a whole underscores the question as to the extent to which decisions from description, or even experimental studies of decisions from experience, generalize outside those carefully crafted settings to other domains and in particular to real-world contexts. As William Goldstein and Elke Weber point out in their chapter criticizing content-impoverished norms in the study of risky decision making (including the use of gambling as a metaphor for risky decision making more generally):
The point is not merely that the experimental practice of using content-impoverished stimuli would have failed to discover a number of interesting phenomena, but that the particular phenomena that would have been overlooked are those that conflict with the overarching theoretical framework.
Goldstein, W. M., & Weber, E. U. (1995). . In J. R. Busemeyer, R. Hastie & D. L. Medin (Eds.), The Psychology of Learning and Motivation (Vol. 32, pp. 83-136), San Diego: Academic Press, p. 92.
Taken together, this line of reasoning suggests that the gambling metaphorThe gambling metaphor is the idea that life itself can be conceived of as a gamble. The metaphor has been central to the history of... that has driven much of the experimental work on risky decision making is not only inappropriate for understanding decisions under risk or uncertainty, it may even be inappropriate for studying actual gambling.