Choice under Strict Uncertainty: Processes and Preferences

Abstract In decisions involving choice under strict uncertainty, decision makers’ choice heuristics varied widely depending on the task conditions. Two experimental task variables, the format of the outcome distribution and the presence or absence of a time constraint, were used to test the sensitivity of choice processes and choice preferences in these decisions. With no time constraint, decision makers made compensatory tradeoffs on the displayed information when the distribution of outcomes was presented as a range, but they used a loss minimization heuristic when the distribution was presented as variability around the range midpoint. With a time constraint, decision makers used a loss minimization heuristic when exposed to the range format presentation of outcomes, whereas in the midpoint format, they focused on the midpoint outcome. Choice preferences also shifted with changes in time constraint. With no time constraint, decision makers preferred high variability alternatives when outcomes were presented in range format, but low variability alternatives in midpoint format presentation. With a time constraint these preferences reversed. Decision makers seemed to adapt their choice processing to the decision conditions rather than using some canonical choice rule regardless of the conditions. This result is consistent with the findings of previous studies that looked at risky choice and risk-free choice. The implication is that although people may have intuitive models of choice under strict uncertainty such as loss minimization, the stronger factor in determining how they make their decisions seems to be the actual task conditions of the decision.