Do losses matter? The effect of information-search technologies on risky choices

Despite its importance, limited attention has been paid to how digital choice interfaces affect risky decision-making. In two pre-registered lottery-choice experiments, the authors test three information-search methods based on well-known heuristics. In the alternative-based search treatment, subjects explore outcomes and probabilities within each lottery. In the characteristic-based search (CBS) treatment, they explore outcomes and probabilities across lotteries. In the Baseline treatment, all information is presented at once. The authors find that in Study 1, where lotteries involve gains and losses, the CBS interface leads to safer choices compared to other treatments. In Study 2, involving only gains, CBS exposure results in riskier choices. By analysing both search behaviour and choices, the authors suggest that CBS promotes non-compensatory decision strategies that focus attention on specific attributes, such as the probability of gain or the highest prize, depending on the outcome domain – leading to either safer or riskier choices.