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Replicating patterns of prospect theory for decision under risk

Nature Human Behaviour volume 4, pages 622–633 (2020)Cite this article

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Abstract

Prospect theory is among the most influential frameworks in behavioural science, specifically in research on decision-making under risk. Kahneman and Tversky’s 1979 study tested financial choices under risk, concluding that such judgements deviate significantly from the assumptions of expected utility theory, which had remarkable impacts on science, policy and industry. Though substantial evidence supports prospect theory, many presumed canonical theories have drawn scrutiny for recent replication failures. In response, we directly test the original methods in a multinational study (n = 4,098 participants, 19 countries, 13 languages), adjusting only for current and local currencies while requiring all participants to respond to all items. The results replicated for 94% of items, with some attenuation. Twelve of 13 theoretical contrasts replicated, with 100% replication in some countries. Heterogeneity between countries and intra-individual variation highlight meaningful avenues for future theorizing and applications. We conclude that the empirical foundations for prospect theory replicate beyond any reasonable thresholds.

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Fig. 1: Effect sizes by item.
Fig. 2: Item replication rates by country.
Fig. 3: Effect sizes by contrast.
Fig. 4: Contrast pair replication rates by country.
Fig. 5: Choices congruent with prospect theory.

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Data availability

All data are available with the preregistered material and code at osf.io/esxc4/.

Code availability

All code is available with the preregistered material and data at osf.io/esxc4/.

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Acknowledgements

We thank a number of colleagues and peers, including K. Kastelic, I. Sakelariev, T. Varkonyi, A. Víg, C. Saponaro, M. Frías and S. Deakin. We also thank Corpus Christi College Cambridge for support in hosting numerous researchers contributing to the study. We especially thank all team members from the Junior Researcher Programme. The authors received no specific funding for this work.

Author information

Authors and Affiliations

  1. Department of Health Policy and Management, Mailman School of Public Health, Columbia University, New York, NY, USA

    Kai Ruggeri & Tomas Folke

  2. Policy Research Group, Centre for Business Research, Judge Business School, University of Cambridge, Cambridge, UK

    Kai Ruggeri, Hannes Jarke & Tomas Folke

  3. School of Psychology, University of Sussex, Brighton, UK

    Sonia Alí

  4. Department of Personality & Health Psychology, Eötvös Loránd University, Budapest, Hungary

    Mari Louise Berge

  5. School of Psychology, University of Padova, Padova, Italy

    Giulia Bertoldo

  6. Department of Psychology, University of Oslo, Oslo, Norway

    Ludvig D. Bjørndal & Ingvild S. Lofthus

  7. Department of Social Psychology and Quantitative Psychology, Faculty of Psychology, University of Barcelona, Barcelona, Spain

    Anna Cortijos-Bernabeu

  8. School of Psychology and Neuroscience, University of St Andrews, St Andrews, UK

    Clair Davison

  9. Department of Psychology, Faculty of Philosophy, University of Belgrade, Belgrade, Serbia

    Emir Demić & Bojana Većkalov

  10. Division of Psychology & Language Sciences, University College London, London, UK

    Celia Esteban-Serna & Keying Wang

  11. Department of Experimental Psychology, University of Oxford, Oxford, UK

    Maja Friedemann

  12. Department of Psychology, Health & Professional Development, Faculty of Health & Life Sciences, Oxford Brookes University, Oxford, UK

    Shannon P. Gibson

  13. Division of Psychiatry and Applied Psychology, University of Nottingham, Nottingham, UK

    Ralitsa Karakasheva

  14. Department of Sociomedical Sciences, Mailman School of Public Health, Columbia University, New York, NY, USA

    Peggah R. Khorrami

  15. Department of Psychology, Faculty of Arts, University of Ljubljana, Ljubljana, Slovenia

    Jakob Kveder & Nastja Tomat

  16. PPR Svendborg, Svendborg Municipality , Svendborg, Denmark

    Thomas Lind Andersen

  17. Trinity College, Dublin, Ireland

    Lucy McGill

  18. Department of Psychology, University Francisco de Vitoria, Madrid, Spain

    Ana E. Nieto & Jacobo Pérez

  19. Department of Social Policy & Intervention, University of Oxford, Oxford, UK

    Sahana K. Quail

  20. Department of Psychology, University of Cambridge, Cambridge, UK

    Charlotte Rutherford

  21. Department of Psychology, University of Cologne, Cologne, Germany

    Felice L. Tavera

  22. Department of Psychology and Educational Sciences, KU Leuven, Leuven, Belgium

    Chiara Van Reyn

  23. Faculty of Social and Behavioural Sciences, University of Amsterdam, Amsterdam, The Netherlands

    Bojana Većkalov

  24. Department of Cognitive Science and Psychology, New Bulgarian University, Sofia, Bulgaria

    Aleksandra Yosifova

  25. Organisation for Economic Cooperation and Development, Paris, France

    Francesca Papa

  26. JDM Lab, Department of Developmental Psychology and Socialization, University of Padova, Padova, Italy

    Enrico Rubaltelli

  27. SDM Lab, Department of Psychology, University of Cambridge, Cambridge, UK

    Sander van der Linden

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  1. Kai Ruggeri
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  28. Aleksandra Yosifova
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  29. Francesca Papa
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  31. Sander van der Linden
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  32. Tomas Folke
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Contributions

K.R. is the lead author and researcher responsible for all aspects of the manuscript. T.F. is a co-lead with primary responsibility for data management, analyses and visualization. S.A., M.L.B., G.B., L.D.B., A.C.-B., C.D., E.D., C.E.-S., M.F., S.P.G., H.J., R.K., P.R.K., J.K., T.L.A., I.S.L., L.M., A.E.N., J.P., S.K.Q., C.R., F.L.T., N.T., C.V.R., B.V., K.W. and A.Y. were part of the country-specific research teams who were responsible for data collection within each country, as well as country-specific supplementary details and general support of the writing. F.P., E.R. and S.v.d.L. were senior advisors on the study and provided input on the methods, analyses, writing and revisions.

Corresponding authors

Correspondence to Kai Ruggeri or Tomas Folke.

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The authors declare no competing interests.

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Peer review information Primary handling editor: Aisha Bradshaw.

Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Extended data

Extended Data Fig. 1 Choices by Gender.

This figure captures the proportion of times participants chose option A as a function of their gender. Error-bars are bootstrapped 95% confidence intervals that respect the hierarchical structure of the data. There are clear gender differences for some items, but no general pattern. As this is the demographic variable with the most differences between groups, it is a meaningful indication of general consistency across the sample (that is, all other demographic indicators were even more similar).

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Ruggeri, K., Alí, S., Berge, M.L. et al. Replicating patterns of prospect theory for decision under risk. Nat Hum Behav 4, 622–633 (2020). https://doi.org/10.1038/s41562-020-0886-x

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