Individuals use heuristics to make decisions or solve problems when faced with complex situations, and currently known heuristics can only explain limited human decision-making behaviors. Anchoring strategy is a decision-making strategy proposed by Kahneman and Tversky. It is a strategy used by decision-makers when the decision-making target is beyond the decision-maker's judgment distance. It can be used to explain the reflection effect and loss aversion effect. On the basis of this hypothesis, this study attempts to further test this hypothesis with a Bayesian model. In order to examine whether people use anchoring strategies in reflex effect and loss aversion situations, this study, based on Bayesian decision model, treats anchoring strategies that follow the principle of mean reversion as the world state S related to the decision maker's action A , in the case of excluding the conditional probability of this state, observe whether the reflex effect and loss aversion effect are still contrary to the expected utility under the rational person hypothesis, so as to test whether people use the anchoring strategy. For this reason, in Experiment 1, we use rationality and profit and loss scenarios (loss/gain) as independent variables of the study to test that the subjective probability of the participants is different from the objective probability. The results show that the main effect of rationality is significant, the main effect of profit and loss situation is significant, and there is a significant interaction between the two. In experiment 2, we re-examined the reflection effect using a Bayesian model. By introducing the calculation method of subjective probability, the research results confirm that mean reversion as an explanation for the reflection effect has utility.

Honggen Chen. Re-examination of reflection effect under Bayesian decision model. Academic Journal of Humanities & Social Sciences (2022) Vol. 5, Issue 2: 142-147. https://doi.org/10.25236/AJHSS.2022.050220.

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