Abstract:

Risk is one of the core attributes of environmental decision-making. Most often, the alternatives of environmental risky decision-making would involve monetary outcomes as well as environmental outcomes, triggering the tradeoff between profit seeking and environmental protection. Expected-value theory, Prospect theory, Equate-to-differentiate theory, as well as models such as MAUT, DRIFT, ITCH, however, solely focus on the decision-making process of homogeneous outcomes. Thus, it’s a novel topic in behavioral decision research to explore how individuals evaluate, integrate and make choices on composite outcomes. Given that the conflict between environmental and monetary values is one of the primary causes that leads to the antagonism of profit seeking and environment protection, the present research focused on the effect of relative values on risky decision-making of composite money-environment gains. A total of 417 college students—specifically, 206 students participated in Experiment 1, 64 in Experiment 2, and 147 in Experiment 3 — participated in the study. In Experiment 1, New Ecological Paradigm Scale (NEP) and Money Ethics Scale (MES) were used to measure individual’s environmental and monetary values respectively. We inspected the effect of relative values, which was represented by the d-value of MES and NEP, on individuals’ preference in the composite risky choice task in which two options had the same expected values based on pilot study. Experiment 2 examined the role of outcome weights in the influence of relative values on composite risky decision-making. Implicit association test was used to identify relative money-oriented and environment-oriented individuals. Experiment 3 used a scrambled-words task to prime one’s monetary or environmental value orientation and explored its effect on weights allocation and composite risk preference. The results indicated that individuals with different relative values will differ in value evaluation and risk preference on the composite gains. The effect remained consistent whenever the relative values was measured by scale, implicit association test, or primed by scrambled-words task. Environment-oriented individuals tended to assign larger weights to the environmental gain in the composite than did money-oriented ones. In addition, compared to money-oriented individuals, environment-oriented individuals were more inclined to take risk in money for the sake of ensuring environmental benefits and more risk-seeking for an extra environmental improvement in the composite outcomes. Overall, the results suggested that activating and shaping decision makers’ relative values could change their risk preference in decision making of composite money-environment gains and thereby promote pro- environment choices. Furthermore, this research initiated a new decision frame in which the options expanded from homogeneous sequential outcomes to heterogeneous composite outcomes.

Key words: composite outcome, environmental decision-making, risky decision-making, monetary values, environmental values