How false feedback influences decision‐makers' risk preferences

Recent decision-making research provides empirical evidence that human risk preferences are constructed “on the fly” during risk elicitation, influenced by the decision-making context and the method of risk elicitation (Kusev et al., 2020). In this article, we explore the lability of human risk preferences and argue that the most recent choices guide decision-making. Accordingly, our novel proposal and experimental method provide a psychological tool that measures people's shift in preferences. Specifically, in our experiment (240 participants, registered UK users of an online survey panel), we developed and employed a two-stage risk elicitation experimental method. The results from the experiment revealed that providing participants with false feedback on their initial decisions (stage 1) changes their risk preferences at the feedback stage of the experiment in the direction of the false feedback. Moreover, participants' final decisions (stage 2) were influenced by the type of feedback (correct or false) and informed by their altered risk preferences at the feedback stage of the experiment. In conclusion, our work provides experimental evidence that human preferences are constructed “on the fly,” influenced by the decision-making context and recent decision-making experience (e.g., Kusev et al., 2020; Slovic, 1995).