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ERIC Number: EJ918256
Record Type: Journal
Publication Date: 2011-Mar
Pages: 13
Abstractor: As Provided
Reference Count: 17
ISBN: N/A
ISSN: ISSN-0022-5002
Modeling the Effect of Reward Amount on Probability Discounting
Myerson, Joel; Green, Leonard; Morris, Joshua
Journal of the Experimental Analysis of Behavior, v95 n2 p175-187 Mar 2011
The present study with college students examined the effect of amount on the discounting of probabilistic monetary rewards. A hyperboloid function accurately described the discounting of hypothetical rewards ranging in amount from $20 to $10,000,000. The degree of discounting increased continuously with amount of probabilistic reward. This effect of amount was not due to changes in the rate parameter of the discounting function, but rather was due to increases in the exponent. These results stand in contrast to those observed with the discounting of delayed monetary rewards, in which the degree of discounting decreases with reward amount due to amount-dependent decreases in the rate parameter. Taken together, this pattern of results suggests that delay and probability discounting reflect different underlying mechanisms. That is, the fact that the exponent in the delay discounting function is independent of amount is consistent with a psychophysical scaling interpretation, whereas the finding that the exponent of the probability-discounting function is amount-dependent is in consistent with such an interpretation. Instead, the present results are consistent with the idea that the probability-discounting function is itself the product of a value function and a weighting function. This idea was first suggested by Kahneman and Tversky (1979), although their prospect theory does not predict amount effects like those observed. The effect of amount on probability discounting was parsimoniously incorporated into our hyperboloid discounting function by assuming that the exponent was proportional to the amount raised to a power. The amount-dependent exponent of the probability-discounting function maybe viewed as reflecting the effect of amount on the weighting of the probability with which the reward will be received. (Contains 7 figures.)
Society for the Experimental Analysis of Behavior. Available from: Indiana University Department of Psychology. Bloomington, IN 47405-1301. Tel: 812-334-0395; FAX: 812-855-4691; e-mail: jeab@indiana.edu; Web site: http://seab.envmed.rochester.edu/jeab/index.html
Publication Type: Journal Articles; Reports - Research
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A