When Are Decisions Improvable? An Evaluation of Diagnostic Methods

We evaluate three methods for identifying improvable choices: documenting specific misconceptions (the Characterization Assessment method), gauging confidence in choices (the Decision Confidence method), and showing that specific behavioral patterns in the domain of interest also emerge in a related domain where they are objectively suboptimal (the Pattern Matching method). In experiments involving risky choice, the three methods imply that different choices are improvable and have conflicting implications regarding legitimate risk preferences. We clarify the assumptions underlying each method and reevaluate the evidence on risk-taking in light of their limitations.