Choice adaptation to increasing and decreasing event probabilities

A constant element of our modern environment is change. In decision-making research however, very little is known about how people make choices in dynamic environments. We report the results of an experiment where participants were asked to choose between two options: a dynamic and risky option that resulted in either a high or a low outcome, and a stationary and safe option that resulted in a medium outcome. The probability of the high outcome in the risky option decreased or increased linearly over the course of the task while the probability of the medium outcome stayed the same throughout. We find that adaptation to change is related to the direction of that change, and that the way people adapt to changing probabilities relates to their willingness to explore available options. A cognitive model based on Instance-Based Learning Theory reproduces the behavioral patterns.