Luck Feelings, Luck Beliefs, and Decision Making

Luck Feelings, Luck Beliefs, and Decision Making Harold W. Willaby Psychology University of Sydney A thesis submitted for the degree of Doctor of Philosophy (PhD) 2012 October 1. Reviewer: Anonymous 2. Reviewer: Michael J. A. Wohl 3. Reviewer: Peter R. Darke Signature from head of PhD committee: ii Abstract Luck feelings have long been thought to influence decision-making involv- ing risk. Previous research has established the importance of prior outcomes, luck beliefs, and counterfactual thinking in the generation of luck feelings, but there has been no comprehensive demonstration of this system of variables that impinge on luck feelings. Moreover, the actual relationship of luck feelings and risky choice has not been directly tested. Addressing these gaps, results from five studies are presented in this thesis. Empirical work begins with an extensive validation exercise of an existing 22-item luck beliefs scale. Those 22 items are refined to a 16-item scale, comprising four luck belief dimensions that inter-relate in a compelling structural ar- rangement. Insights from this exercise, and a subset of the items are used throughout the remainder of the thesis. Results from two studies contra- dicted the counterfactual closeness hypothesis, the most prominent theory in the psychology of luck, which holds that counterfactual thinking is essen- tial for generating lucky feelings. However, one study found that affect and luck feelings are not unitary, as evidenced by a weak form of double disso- ciation of affect and lucky feelings from overestimation and overplacement. Another study found lucky and unlucky feelings to be distinct. The effects of lucky feelings and unlucky feelings on risky choice differ by the nature of a prior outcome. For negative outcomes, unlucky feelings are likely to influence risky choices. For positive outcomes, lucky feelings are likely to influence risky choices. The type of risky choice most affected by lucky feelings—for positive experiences—is ambiguity tolerance in the probabil- ity distributions of prospective outcomes. The Activation Theory of Luck Feelings (ActLF) is proposed, which reconciles previous findings to those reported herein. iv To my family. Acknowledgements It is with a poignant sense of the passage of time that I reflect on the many supportive colleagues, friends, and of course family members that have urged me along toward this present moment. The journey began, it seems, so long ago that the memories are misty. A course at Michigan State University seven years ago introduced me to Dr. Bruce Burns. The first data we collected together followed shortly after our meeting, and yielded I recall now, no support for my naive and quite poorly-formed ideas. Bruce returned to his home country of Aus- tralia shortly thereafter. Several months later, I found myself also back in Australia having dinner with Bruce, asking him to advise me as a PhD stu- dent. I really had no idea what the next few years would bring. There were the usual challenges related to intellectual growth, skills acquisition, and errors which lead to both. There were also a few unusual challenges unrelated to academic pursuit. Through every single one of these challenges, Bruce seemed to always have the longer view. His mentoring was patient, constructively critical, developmentally noninterventionist (when appropriate), and always mindful of the larger objectives. Bruce gave me every assistance needed, but not every assistance desired. Independence in thought and ability has been the result. Bruce has been an excellent role model in the attitudes and orientations of a scientist, and in the conduct of science. Thank you Bruce. I did not face those aforementioned usual and unusual challenges alone. To my dear partner, Claudia Pitts, I offer what can only be the most paltry of acknowledgements relative to the scale and scope of the support she provided. Throughout my journey, Claudia was working on her own PhD, being a wonderful mother to our daughter, earning an income, building a business, keeping a house, and looking after our social lives. I’d like to think there was some balance between our efforts in each of these domains, but I’m certain that it’s tipped heavily in her direction—especially during the last six months. My parents have been supportive of me through each stage of my education, which is to say nothing of the many other aspects of my life. It was my mother who first taught me to read. My father I recall spent most of his time engaged in the work that would eventually provide the financial support to put me through an undergraduate degree. Twice, when they thought I’d be finished with ‘school’ and starting a career, I surprised them with a decision to continue. First through a masters degree, and then through a PhD. Their support for each was crucial. I hear their voices often, echoing down through the years, time and again saying, “you can do anything you set your mind to.” The Pitts family have been extraordinary in their support of me. Like a second family now, they have cheered me on for the last five years. But their support extends beyond cheering: like Claudia and my own parents, they were there through the thick and thin of all those unusual challenges. Were it not for the work (read: income) opportunities that Gerry Guinan sent me, I would probably still be doing teaching assistant work while slog- ging through a PhD part-time. Instead, here I am penning the final words of this thesis. I also thank two lab assistants in particular, Jonathan Krygier and ZiCheng Li. Both helped in collection of data, and were just generally helpful when bouncing thoughts and ideas around. Thanks and acknowl- edgement to the many fine members of the psychology department at the University of Sydney and the outstanding intellectual environment they’ve built together. Final acknowledgements for three reviewers: Peter Darke, Michael Wohl, and an individual who chose to remain anonymous. I’m honoured by the effort and attention you gave to my thesis. I’m humbled by your keen insights and deep understanding of the topic. iv Contents List of Figures xi List of Tables xiii 1 Introduction1 1.1 Chapter Overview . .2 1.2 ‘Luck’: Origins and Modern Day Use . .2 1.3 What is Luck? . .5 1.4 Luck Attribution . .9 1.5 Luck Beliefs . 12 1.6 Lucky Feelings . 14 1.6.1 Semantic Approach . 15 1.6.2 Phenomenological Approach . 18 1.6.3 Factors Leading to Lucky Feelings . 22 1.7 Summary and Conclusions . 23 2 Literature Review 25 2.1 Contextual Literature . 25 2.1.1 Attribution Theory . 26 2.1.2 Illusion of Control . 27 2.1.3 Common Conceptions of Luck . 28 2.2 Relevant Empirical Literature . 33 2.2.1 Darke and Freedman (1997b) . 34 2.2.2 Wohl and Enzle (2002) . 39 2.2.3 Wohl and Enzle (2003) . 42 2.2.4 Jiang, Cho, and Adaval (2009) . 46 v CONTENTS 2.3 Summary of Research Issues . 53 2.3.1 Luck Beliefs . 53 2.3.2 Counterfactual Thinking . 54 2.3.3 Affect . 55 2.3.4 Lucky Feelings . 56 2.3.5 Dependent Variables and Experimental Manipulations . 57 2.3.6 A Holistic View of Lucky Feelings and Decision Making . 58 2.4 Overview of Empirical Chapters . 59 3 Validation of the 16-item Belief in Good Luck Scale (BIGL16) 61 3.1 Introduction . 61 3.1.1 The History of Luck Belief and Luck Belief Measurement . 63 3.1.2 Relating the BIGL12 and BIGL22 . 66 3.1.3 Chapter Organisation . 68 3.2 Factor Structure of BIGL12 . 71 3.2.1 Data and Descriptives . 72 3.2.2 Factor Analysis Results . 73 3.3 The Revised BIGL12 Scale (R-BIGL12) . 78 3.3.1 H1: General Belief in Luck (GBL) ! Personal Good Luck (PGL) . 78 −! 3.3.2 H2: Disbelief in Luck (DL) − General Belief in Luck (GBL) . 78 −! 3.3.3 H3: Disbelief in Luck (DL) − Personal Good Luck (PGL) . 79 3.3.4 Bootstrap Tests of Significance for H1, H2 and H3 . 79 3.4 Specification of the R-BIGL12+ . 81 3.4.1 Superstitious Beliefs . 81 −! 3.4.2 H4: Disbelief in Luck (DL) − Lucky Superstitions (LS) . 83 3.4.3 H5: General Belief in Luck (GBL) ! Lucky Superstitions (LS) . 83 3.4.4 H6: General Belief in Luck (GBL) ! Astrological Superstitions (AS) 85 −! 3.4.5 H7: Disbelief in Luck (DL) − Astrological Superstitions (AS) . 85 3.4.6 Bootstrap Tests of Significance for the R-BIGL12+ . 86 3.5 Measurement Model Assessment of the R-BIGL12+ . 87 3.6 Structural Model Assessment of the R-BIGL12+ . 90 3.7 Part One Conclusions . 92 3.8 Factor Structure of the R-BIGL22 . 93 vi CONTENTS 3.8.1 Descriptives . 95 3.8.2 Factor Analysis Results . 97 3.9 Specification of the BIGL16+ . 99 −! 3.9.1 H8: Luck is Random (LIR) − General Belief in Luck (GBL) . 101 3.9.2 H9: General Belief in Luck (GBL) ! Belief in Personal Bad Luck (PBL) . 101 −! 3.9.3 H10: Cultural Background (Asian) − Luck is Random (LIR); H11: Cultural Background (Asian) ! General Belief in Luck (GBL)102 3.9.4 H12: Verbal Reasoning (EAT) ! Luck is Random (LIR) . 103 3.9.5 H13: Understanding of Randomness (RQ) ! Luck is Random (LIR)103 3.10 Measurement Model Assessment of BIGL16+ . 104 3.11 Structural Model Assessment of the BIGL16+ . 105 3.11.1 BIGL16+ Tests of Hypotheses . 105 3.11.2 Coefficients of Determination (R2)................. 108 3.11.3 Total Effects in the BIGL16+ Model . 109 3.11.4 Mediation in the BIGL16+ Model .

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