Priors and Payoffs in Confidence Judgments

1 Abstract Priors and payoffs are known to affect perceptual decision-making, but little is understood about how they influence confidence judgments. For optimal perceptual decision-making, both priors and payoffs should be considered when selecting a response. However, for confidence to reflect the probability of being correct in a perceptual decision, priors should affect confidence but payoffs should not. To experimentally test whether human observers follow this normative behavior, we conducted an orientation-discrimination task with varied priors and payoffs, probing both perceptual and metacognitive decision-making. We then examined the placement of discrimination and confidence criteria according to several plausible Signal Detection Theory models. In the normative model, observers use the optimal discrimination criterion (i.e., the criterion that maximizes expected gain) and confidence criteria that shift with the discrimination criterion that maximizes accuracy (i.e., are not affected by payoffs). No observer was consistent with this model, with the majority exhibiting non-normative confidence behavior. One subset of observers ignored both priors and payoffs for confidence, always fixing the confidence criteria around the neutral discrimination criterion. The other group of observers incorrectly incorporated payoffs into their confidence by always shifting their confidence criteria with the same gains-maximizing criterion used for discrimination. Such metacognitive mistakes could have negative consequences outside the laboratory setting, particularly when priors or payoffs are not matched for all the possible decision alternatives.