Forecasting economic decisions under risk : the predictive importance of choice-process data

We investigate various statistical methods for forecasting risky choices and identify important decision predictors. Subjects (n=44) are presented a series of 50/50 gambles that each involves a potential gain and a potential loss, and subjects can choose to either accept or reject a displayed lottery. From this data, we use information on 8800 individual lottery gambles and specify four predictor-sets that include different combinations of input categories: lottery design, socioeconomic characteristics, past gambling behavior, eye-movements, and various psychophysiological measures that are recorded during the first three seconds of lottery-information processing. The results of our forecasting experiment show that choice-process data can effectively be used to forecast risky gambling decisions; however, we find large differences among models’ forecasting capabilities with respect to subjects, predictor-sets, and lottery payoff structures.