Reward Based Risk Simulation

Undergraduate students from Washington University in St. Louis with a variety of majors and in different grades participated in this Reward Based Risk Simulation

  • The participant first completed a series of multiplication problems as a control for the experiment
  • The experiment began with 8 face down playing cards in a row with a $25 gift card at the end
  • The first card will be flipped over and the participant will be asked “How likely is it that you are correct?*” on a scale from 1-9, with 9 being 100% certain and 1 having 0% certainty
  • A card is drawn from the deck and revealed to the participant
  • If the participant guessed correctly, the process is repeated with the next card until the simulation is won. If not, the simulation ends, but is repeated one more time with a different set of 8 cards

*For this experiment we choose to ask “How likely is it that you are correct” instead of “How risky is this prospect” which is generally used to measure risk perception. We chose to use deception and not reveal to the participants the true purpose of the experiment until after the reward basked risk simulation was completed, to capture their natural feelings and to not possibly alter their feelings by knowing that we desired to measure risk. We felt that asking participants to rank their likeliness of success was the best alternative to directly asking how risky they felt.