# Impact of Self-Experience on Risk Preferences | Study
> Explore how personal vs. vicarious experience affects decision-making in rare events. A behavioral economics study from Technion University.

Tags: behavioral-economics, risk-management, experience-description-gap, decision-science, risk-preferences, technion, research-project
## Self-Experience and Rare Events
* Title: Self-Experience Amplifies the Impact of Rare Events on Risk Preferences
* Authors: Omer-Shai Becker & Lior Malachi, Technion – Israel Institute of Technology (2026)

## The Experience-Description Gap
* Key Concept: People weight information differently based on whether it is learned via statistics (description) or history (experience).
* The Gap: Individuals often underweight rare events when relying on personal experience.

## Real-World Motivation
* Case Study 1: Terra-Luna Crash (2022) - Investors ignored warnings until suffering personal losses.
* Case Study 2: Micro-mobility - Riders ignore safety risks until a personal or vivid accident occurs.

## Research Methodology
* Question: Does the source (personal vs. vicarious) affect risk preference updating?
* Design: 2x2 Experimental Design with ~260 online participants.
* Factors: Experience Source (Personal vs. Vicarious) and Outcome Domain (Rare Gain vs. Rare Loss).

## Tested Hypotheses
* Hypothesis 0: Limited-Sampling Error (Predicts no difference in behavior).
* Hypothesis 1: Affective Salience (Predicts personal experience evokes stronger emotional reactions).
* Hypothesis 2: Surprise-Triggered Change (Predicts rare outcomes disrupt behavioral inertia regardless of gain/loss).

## Analysis & Results Plan
* Statistical Tools: Logistic Regression and Behavioral Inertia Tests.
* Goals: Distinguishing between emotional amplification and statistical sampling errors.

## Conclusion & Practical Applications
* Theoretical: Isolates if emotion drives the experience-description gap.
* Practical: Suggests that safety training and financial interventions may require VR simulations to mimic personal emotional impact rather than simple observation.
---
This presentation was created with [Bobr AI](https://bobr.ai) — an AI presentation generator.