Probability Weighting and Cognitive Ability

Probability weighting is a major concept for accommodating systematic departures from expected utility theory. We examine the relation between probability and cognitive ability with two experiments: one recruiting subjects large variation in other using within-subject manipulation of time constraints lottery choices tests. find significant association likelihood insensitivity—the component weighting—and limitation such that lower score or more interrupted cognition due to pressure respond less discriminately intermediate probabilities over-sensitively extreme probabilities. Our findings shed light on sources anomalous against This paper was accepted by Yan Chen, behavioral economics decision analysis.