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Risk as feelings hypothesis.

Choice under risk (paper)

In this example we want to show that self ranking procedure can be applied to risk-as-feeling model of choice under risk or uncertainty. The divergence between emotional reactions to risk (and cognitive evaluations of) is a common source of the feeling of inter personal conflict (see, e.g., Schelling, 1984 [10]). Psychologists from different sub disciplines have been drawing similar distinctions between two qualitatively diffeerent modes of information processing. Sloman (1996) [11], for example, makes distinction between rule based and associative processing.

Risk-as-feelings model. Risk-as-feelings hypothesis is illustrated in Figure 1. Loewenstein & others (2001) [6] argue that in risk-as-feelings model ...

... people are assumed to evaluate risky alternatives at a cognitive level, as in traditional models, based largely on the probability and desirability of associated consequences. Such cognitive evaluations have affective consequences, and feeling states also exert a reciprocal in uence on cognitive evaluations. At the same time, however, feeling states are postulated to respond to factors, such as the immediacy of a risk, that do not enter into cognitive evaluations of the risk and also respond to probabilities and outcome values in a fashion that is different from the way in which these variables enter into cognitive evaluations.
risk-as-feelings
Figure 1. Risk-as-feelings model

One possible self-dual hierarchical structure of the risk-as-feeling model is given in Figure 2. (1) In the first step we compare out- comes with respect to one criterion, risk for example. We give the priority to the outcome which is less risky. (2) In the second step we compare actions with respect to each outcome in the same way as in traditional model. (3) In the third step we compare outcomes with respect to actions. For the fixed action we give the priority to the outcome (among two of them) which has greater probability to happen. (4) In the forth step we compare criteria risk and desir- ability with respect to outcomes. The question is which criterion (as a principle) is sustained more by given outcome.

risk-as-feelings-hierarchy

Figure 2. Risk-as-feelings hierarchy

In the risk-as-feelings hierarchical model no a priori weights are given. We have only a bounce of preference graphs which may be aggregated into the group preference matrix.

An example. Choice of the climbing route.

In this example two climbers have intention to climb in the Dolomites, north Italy. Their possible choices (after a long discussion) of the climbing routes are (one of):
  1. via ferrata,
  2. classical route,
  3. and first repetition.
Possible outcomes are:
  1. spending a night in bivouac sac (if time goes slowly)
  2. exit through via ferrata (in case of emergency),
  3. glory (after finishing the first repetition)
  4. and effort.
Input data

Start iterative process

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