Abstract:

Previous research has found that the classic common consequence effect (CCCE) does not occur in narrow choice-set outcome ranges, which leads to the conclusion that individual decision-making behavior aligns with Expected Utility Theory (EUT) in these cases. However, the absence of the CCCE does not imply that the dual common consequence effect (DCCE), which contradicts EUT, does not occur either. Furthermore, related studies generally adopt specific probability levels and have not examined whether the CCCE appears after changes in probability. In light of this, two logically progressive experiments were conducted to explore three questions. First, does the DCCE occur in narrow choice-set outcome ranges, and how does the variation in choice-set outcome ranges affect it? Second, after changes in probability, does the CCCE appear in narrow choice-set outcome ranges? Third, what is the mechanism by which the choice-set outcome range influences the two types of common consequence effects? The results revealed that: (1) the DCCE not only exists in narrow choice-set outcome ranges but is also significantly enhanced compared to wide choice-set outcome ranges; (2) compared to wide choice-set outcome ranges, the CCCE is significantly weakened in narrow choice-set outcome ranges, yet it still exists; (3) the choice-set outcome range influences both types of common consequence effects by altering individuals' risk perception of objective probabilities (i.e., probability weighting). These findings not only refute the notion that EUT applies to narrow choice-set outcome ranges but also reveal the dependence of decision preferences on choice-set outcome ranges. Additionally, they provide empirical evidence for the development of non-expected utility theories, such as cumulative prospect theory, from the perspective of probability weighting's dependence on choice-set outcome ranges. From a practical standpoint, the experimental findings also offer managerial insights for product design and adjustments in blind box sales.

Key words: risk decision making, common consequence effect, dual common consequence effect, choice-set outcome range, probability weights