An Increasingly Risky World: Double Probability Discounting of Gains

In past studies observing probability discounting, the subjective value of a probabilistic reward has been measured by finding the indifferent point between a larger, probabilistic reward and a smaller, certain reward. The present study observed probability discounting when a common multiplier (between 0.05 and 1.0) is added to both rewards, making both options probabilistic. In two experiments, subjective values of a wide range of amounts of money were fit to the hyperbolic function: V = A/[1 + h(1 – p)/p] s . Magnitude effects showed that the rate of discounting increased as the amount of money increased. High to moderate common multipliers had no effect on the rate of discounting, however, at very low common multipliers the rate of discounting systematically decreased.