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  • Psychological Science

Opportunity Neglect: An Aversion to Low-probability Gains

By: Emily Prinsloo, Kate Barasz, Leslie John and Michael I. Norton
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    Abstract

    Seven preregistered studies (N = 2,890) conducted in the field, lab, and online document opportunity neglect: a tendency to reject opportunities with low probability of success, even when they come with little or no objective cost (e.g., time, money, reputation). In Study 1, participants rejected a low-probability opportunity in an everyday context. Participants also rejected incentive-compatible gambles with positive expected value—for both goods (Study 2), and money (Studies 3–7)—even with no possibility of monetary loss and non-trivial stakes (e.g., a 1% chance at $99). Participants rejected low-probability opportunities more frequently than high-probability opportunities with equal expected value (Study 3). While taking some real-life opportunities comes with costs, we show that people are even willing to incur costs to opt out of low-probability opportunities (Study 4). Opportunity neglect can be mitigated by highlighting that rejecting an opportunity is equivalent to choosing a zero probability of success (Studies 6-7).

    Keywords

    Opportunities; Behavior; Risk and Uncertainty; Success; Perception

    Citation

    Prinsloo, Emily, Kate Barasz, Leslie John, and Michael I. Norton. "Opportunity Neglect: An Aversion to Low-probability Gains." Psychological Science (in press).
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    About The Authors

    Leslie K. John

    Negotiation, Organizations & Markets
    →More Publications

    Michael I. Norton

    Negotiation, Organizations & Markets
    →More Publications

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