What's in the Adaptive Toolbox and How Do People Choose From It? Rational Models of Strategy Selection in Risky Choice

AbstractAlthough process data indicates that people often rely on various (and often heuristic) strategies to decide between risky options, it is currently unclear how they select between different strategies for different choice problems. To address this challenge, it has been proposed that people adaptively choose from a toolbox of simple strategies. But which strategies are contained in this toolbox, and how do people select among them for a given decision problem? Here, we develop a model that assumes that people rationally select from a set of strategies to make a risky choice; the model allows one to infer which strategies are contained in a person's toolbox and specifies how strategy selection proceeds. Using cross-validation in an empirical data set, we find that this rational model of strategy selection from an adaptive toolbox predicts people's choices better than individual strategies (even when they are allowed to vary across participants) and previously proposed toolbox models. Our model comparisons show that both inferring the toolbox and rational strategy selection are critical for accurately predicting people's risky choices. Furthermore, our model-based analysis reveals considerable individual differences in the set of strategies people are equipped with and how they choose among them; these individual differences could partly explain why some people make better choices than others. These findings represent an important step towards a complete formalization of the notion that people select from an adaptive toolbox of simple strategies.

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