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Abstract
According to a common conception in behavioral decision research, two cognitive processes-overestimation
and overweighting-operate to increase the impact of rare events on people's choices.
Supportive findings stem primarily from investigations in which people learn about
options via descriptions thereof. Recently, a number of researchers have begun to
investigate risky choice in settings in which people learn about options by experiential
sampling over time. This article reviews work across three experiential paradigms.
Converging findings show that when people make decisions based on experience, rare
events tend to have less impact than they deserve according to their objective probabilities.
Striking similarities in human and animal experience-based choices, ways of modeling
these choices, and their implications for risk and precautionary behavior are discussed.