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When Things Don't Add Up: The Role of Perceived Fungibility in Repeated-Play Decisions
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posted on 01.01.2004by Michael L. DeKay, Tai Gyu Kim
Previous research on repeated-play decisions has focused on choices with fungible
outcomes. In two studies, we investigated the perceived fungibility of outcomes over repeated
plays of risky prospects in a variety of situations, as well as the relationship between perceived
fungibility and preferences for taking risks in those situations. Perceived fungibility varied
substantially across participants and situations, with outcomes experienced by different people
(e.g., medical outcomes for different patients) receiving lower scores. Higher perceived
fungibility was associated with more favorable evaluations of repeated plays of risky prospects
with positive expectations. Additionally, perceived fungibility moderated the effect of repetition,
such that the increased attractiveness of repeated plays relative to a single play was diminished
when perceived fungibility was low. Although evaluating the overall distribution of outcomes is
arguably rational when monetary outcomes accrue to one person, treating each play as a separate
event may be rational when aggregation is considered inappropriate.