Factors Affecting Probability Matching Behavior

In life, people commonly face repeated decisions under risk or uncertainty. While normative economic models assume that people tend to make choices that maximize their expected utility, suboptimal behavior - in particular, probability matching - is frequently observed in research on repeated decisions. Probability matching is the tendency to match prediction probabilities of each outcome with the observed outcome probabilities in a random binary prediction task. For example, when people are faced with making with a sequence of predictions, such as repeatedly predicting the outcome of rolling a die with four sides colored green and two sides colored red, most people allocate about two-thirds of their predictions to green, and one-third to red. The optimal strategy, referred to as maximizing, would be to choose the outcome with the higher probability in every trial in the prediction task. Various causes for probability matching have been proposed during the past several decades. Here it is proposed that implicit adoption of a perfect prediction goal by decision makers might tend to elicit probability matching behavior. Thus, one factor that might affect the prevalence of probability