When employees are faced with novel situations it is often necessary for them to acquire new information. Unreliability of information sources and uncertainty regarding information usefulness make the information acquisition process analogous to a sequence of risky decisions. Prospect Theory (Kahneman & Tversky, 1979) and its generalizations are currently the dominant approach to the study of risky decision making in psychology and economics due to their ability to accurately describe the decision biases that are frequently document in the presence of risk and uncertainty. Using a lab-based computer simulation, CRONUS SOLO, common biases from the Prospect Theory literature are examined for sequential risky decision making during information acquisition. Additionally, common relationships between individual differences and sequential risky decision making as well as the effect of learning and feedback on risky decision making are explored. The biases present during the information acquisition process are not fully explained by Prospect Theory and its generalizations. Overall, individuals became more efficient and optimal decision makers over time. The effects of information reliability, information framing, and specific individual differences are presented. Finally, potential explanations for the current findings as well as implications for training are discussed. -- Abstract.
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