Prospect Theory or Image Theory?

We had a disagreement whether Prospect Theory or Image Theory involved a two-stage decision making process: (1) editing followed by (2) evaluation.

The quoted text below is from Payne's 1981 article in the Psychological Bulletin entitled Contingent Decision Behavior. Basically, this is excerpted from the last page in which he contrasts Hammond's (1980) hypothesis that cognition will oscillate with the two-stage process of Prospect Theory.



"The idea of switching among modes of thought seems reasonable. The relation between time and modes of thought, however, may have even more order than Hammond suggested. Consider, for example, prospect theory (Kahneman & Tversky, 1979). A key concept in prospect theory is that risky-choice behavior consists of a two-phase process. The first phase involves editing the given decision problem into a simpler representation in order to make the second phase of evaluation and choice of gambles easier for the decision maker. Included in the first phase are such editing operations as coding, cancellation, and segregation (Kahneman & Tversky, 1979; Tversky & Kahneman, 1981). Editing operations would seem to correspond to the intuitive and perceptual mode of thought. Evaluation would be more an analytical mode of thought. Consequently, a combination of the Hammond and Kahneman and Tversky ideas suggests that a complex risky choice problem will involve a progression from intuitive to analytical cognition. This suggests that the types of errors observed and the influence of various task variables
will vary systematically over the course of the risky-problem-solving episode. Of course, the possibility exists that the process of intuitive to analytical cognition could be short circuited at any time."