Stimuli and procedure
Participants received a questionnaire describing 8 risky prospects, presented as investment opportunities (see Ta- ble 1). The prospects involved two positive outcomes and one negative outcome, all with equal probabilities (1/3), and were designed to have a correlation of about zero between their risk (the size of the negative outcome) and expected return. The instructions to the participants were as follows: “Assume that you are an investor facing 8 possible investment possibilities. Each of these investments involves two gains and one loss. The loss stems from expenses associated with the investment, and the gains are net gains. Your task is to evaluate each of the investments on 6 scales. Before making your evaluations, please review all investments so you will be able to assess their relative value.”