Internal and External Control as Determinants of Decision Making under Conditions of Risk

Decision making, although not a new area in psychology, has recently become the subject of new and widespread attention in relatively contrasting approaches to human behavior. On the one hand, the theory of games (von Neumann & Morgenstern, 1947) has initiated an interest in the applicability of mathematical models to interpersonal situations involving a conflict of interests. A discussion and critical evaluation of the work in games and decisions that derives from the von Neumann and Morgenstern program can be found in Luce and Raiffa (1958). This tradition shades off into investigations of problems that are related to different disciplines such as logic, economics, and psychology. Examples of this "formalistic" approach to decision making that have been instigated by game theory are the work of Edwards (1953, 1954a, 1954b, 1 9 5 4 ~ ) and Davidson, Siegel, and Suppes (1957). The other approach to decision making is personality-centered. Typical of this line of inquiry are the studies which focus on the motivational determinants and empirical correlates of risk taking (Atkinson, 1957; McClelland, 1958; Scodel, Ratoosh, & Minas, 1959). The present study is an attempt to explore a further determinant of decision making under conditions of risk which we have called internal versus external control. Suppose a person is confronted with a number of possible bets of zero expected value (i.e., bets which pay off in complete accord with objective probabilities), one of which he has to make, and suppose, too, that he has full knowledge of the objective probabilities regarding outcomes. On what basis does he select among these bets? I t has already been established that people have stable probability preferences (Edwards, 1953, 1954b), but our concern is with the possible effects of one's Wekanschauung on such preferences. What we mean by internal control in this context is a tendency to employ a suategy which attempts to maximize the number of favorable outcomes. The term can be given a broader meaning to specify a general belief in one's ability to order his own fate, but with respect to situations where chance is perceived as governing outcomes, internal control would be restricted to this tendency to assure oneself of conuol by a cautious and planned selection of probabilities. By external control we mean a disposition to select bets either on the basis