Ambiguity is characterized as uncertainty about the probabilities with which outcomes can occur. Previous research has established that subjects, when given a choice between two options differing in their degree of ambiguity, tend to prefer the less ambiguous option, exhibiting ambiguity avoidance. The present paper addresses the psychological sources of this behavior. Five plausible hypotheses for the basis of ambiguity avoidance were extracted from the literature, along with a sixth proposal which questioned the deliber-ateness of the behavior. None of the hypotheses had previously been sufficiently examined empirically. In a series of five experiments, each of the proposed explanations of ambiguity avoidance was tested. Of the six, only one, termed "other-evaluation," had an effect on subjects' choice behavior in an ambiguous situation involving monetary lotteries. The other-evaluation hypothesis states that a decision maker, in making a choice, anticipates that others will evaluate his or her decision; and, so, makes the choice that is perceived to be most justifiable to others. This choice is for the option having the smallest degree of ambiguity. It is concluded that the other-evaluation hypothesis offers the most promising direction for future research regarding the psychology of choice under ambiguity.
|Original language||English (US)|
|Number of pages||27|
|Journal||Organizational Behavior and Human Decision Processes|
|State||Published - Oct 1986|
Bibliographical noteFunding Information:
The authors thank Robert Pachella, Donald Fisher, and John Kounios for their assistance in recruiting subjects for Experiments 2 and 5. We are also grateful to Robert Revnew for his assistance in carrying out Experiment 4. This research was supported in part by National Institute of Mental Health Training Grant MH16892. Richard A. Abrams is now at Washington University, St. Louis, MO. Reprint requests should be sent to Shawn P Curley, Department of Management Sciences, University of Minnesota, 271 19th Avenue South, Minneapolis, MN 55455.