The Alternative Omen Effect: Illusory negative correlation between the outcomes of choice options.

In situations of choice between uncertain options, one might get feedback on both the outcome of the chosen option and the outcome of the unchosen option ("the alternative"). Extensive research has shown that when both outcomes are eventually revealed, the alternative's outcome influences the way people evaluate their own outcome. In a series of experiments, we examined whether the outcome of the alternative plays an additional role in the decision-making process by creating expectations regarding the outcome of the chosen option. Specifically, we hypothesized that people see a good (bad) alternative's outcome as a bad (good) sign regarding their own outcome when the two outcomes are in fact uncorrelated, a phenomenon we call the "Alternative Omen Effect" (ALOE). Subjects had to repeatedly choose between two boxes, the outcomes of which were then sequentially revealed. In Experiments 1 and 2 the alternative's outcome was presented first, and we assessed the individual's prediction of their own outcome. In Experiment 3, subjects had to predict the alternative's outcome after seeing their own. We find that even though the two outcomes were in fact uncorrelated, people tended to see a good (bad) alternative outcome as a bad (good) sign regarding their own outcome. Importantly, this illusory negative correlation affected subsequent behavior and led to irrational choices. Furthermore, the order of presentation was critical: when the outcome of the chosen option was presented first, the effect disappeared, suggesting that this illusory negative correlation is influenced by self-relevance. We discuss the possible sources of this illusory correlation as well as its implications for research on counterfactual thinking.

Assigning Israeli medical graduates to internships.

BACKGROUND: Physicians in Israel are required to do an internship in an accredited hospital upon completion of the medical studies, and prior to receiving the medical license. For most students, the assignment is determined by a lottery, which takes into consideration the preferences of these students. OBJECTIVES: We propose a novel way to perform this lottery, in which (on average) a larger number of students gets one of their top choices. We report about implementing this method in the 2014 Internship Lottery in Israel. METHODS: The new method is based on calculating a tentative lottery, in which each student has some probability of getting to each hospital. Then a computer program "trades" between the students, where trade is performed only if it is beneficial to both sides. This trade creates surplus, which translates to more students getting one of their top choices. RESULTS: The average student improved his place by 0.91 seats. CONCLUSIONS: The new method can improve the welfare of medical graduates, by giving them more probability to get to one of their top choices. It can be applied in internship markets in other countries as well.