Forgetting the Past: Individual Differences in Recency in Subjective Valuations From Experience

Recent research investigating decisions from experience suggests that not all information is treated equally in the decision process, with more recently encountered information having a greater impact. We report 2 studies investigating how this differential treatment of sequentially encountered information affects subjective valuations of risky prospects when observations of past outcomes must be used to estimate the prospect's payoff distribution, and examine how individual differences in cognitive capacities influence information usage. In Study 1 we found that a sliding window of information model that averages a subset of (only) the most recently encountered outcomes (samples) fit the subjective valuation data for a portion of individuals better than models that integrate all observed outcomes. This pattern of results is replicated in Study 2, in which we also found that the amount of information used to form valuations varies greatly between individuals, and that individual difference in memory span explains a portion of this variation. Combined, these results suggest a process in which information usage is in part reliant on cognitive capacity, and where information aggregation appears to be memory based rather than online, providing new insight into the processes involved in the construction of valuation in experiential decisions.