Abstract
We investigated how explanation and experience influence people’s choices and their trust (in the communicator of the explanation) under uncertainty. Using a novel decisions-from-experience experimental design, we manipulated two factors between subjects: communicational approaches about and experiences with negative rare events. Communicational approaches included brief explanations either offering no prediction (“we don’t know if the rare event is going to happen”), a certain prediction (“the rare event is definitely going to happen”), or a hedged prediction (“we should anticipate the rare event, even though it might not happen”). Half the participants then experienced a rare outcome, while the other half did not. Participants’ choices were largely unaffected by communicational approach, however, experience with the negative rare event consistently reduced risk seeking. Their trust was more substantially affected. Perhaps unsurprisingly, trust was reduced irrespective of communicational approach when rare events negatively affected participants. Yet, when predicted rare events failed to eventuate, trust was retained more when predictions were hedged compared to when they were certain. These results suggest that, while explanations may need to be more comprehensive to influence people’s choices, they can play a role in retaining people’s trust.