PREFERENCES BETWEEN RISKY PROSPECTS WITH VIRTUAL TENDER Page | 1 PREFERENCES BETWEEN RISKY PROSPECTS WITH VIRTUAL TENDER David Modic, Stephen E.G. Lea and Louise Pendry Abstract One way of looking at scam compliance is to treat it as the result of as a decision under risk, and some scam victims indeed report that they treated the scam as, essentially, a long-odds gamble. There is a copious literature about risky decisions, but little of it has been explicitly applied to decisions taken on the Internet. This article aims to uncover whether we approach virtual risky situations differently to concrete ones and through that infer whether we need to consider differences in approaches to Internet and concrete scams. 84 participants answered two different questionnaires, both modified from the one Kahneman and Tversky used to establish the core facts underlying prospect theory. Both modified questionnaires were delivered over the internet but one specified the decision outcomes in terms of concrete money, closely mimicking Kahneman and Tversky’s questions, while the other specified the decision outcomes in terms of internet-specific currency. Participants’ decisions were highly similar in the two situations, and in both cases were congruent with those of the participants in Kahneman and Tversky’s original paper-based study. We conclude that existing literature on decision under risk can safely be applied to the problem of compliance with internet scams. Introduction The present experiment is the initial step in an investigation of internet scam compliance. It investigates how choice under uncertainty is affected by the presentation of choices over the internet, as a preparatory step to using internet technology to study how uncertainty may affect the decision to comply with a scam. We make choices under conditions of uncertainty every day. Should a person buy a particular used car? Should they invest in a hedge fund? Lack of complete information and time as well as cognitive constraints are considered to be one group of factors that may explain why we are forced to take chances