A Dynamic Dual-Process Model of Decision-making Under Uncertainty


Current dynamic models of decision-making assume that a unitary system is responsible for forming preferences. However, extensive research has shown that decision-making and behavior result from the interaction of two separate systems of reasoning - one that is fast, automatic, and experiential and one that is slow, deliberative and rational. This paper develops the first dynamic dual-process model of decision-making that can account for choice, response times, and prices. The model is applied to several phenomena from the risky decision-making literature including enhancements in preference by small losses, preference reversals due to response mode, and the influence of price and affect on preference.

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