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Title:Effects of Risk and Ambiguity on Behavioral Choice and Resource Allocation Decisions
Author(s):Sawyer, John Edward
Department / Program:Psychology
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Psychology, Industrial
Abstract:Decision researchers have consistently found that uncertainty has separate effects on judgments and choices. Decision theorists typically focus on binary choice alternatives. However, many decision problems involve determining optimal allocations of resources across continuously distributed competing demands. Scholars of organizational behavior have suggested that individuals form a perception of the form of the contingency functions that relate acts to outcomes. They assume that individuals then behave with respect to those perceived contingency functions, without regard to uncertainty related to those contingencies.
This thesis applies decision theory notions about the effects of risk and ambiguity to the study of the judgments of continuous act to product contingencies and allocation decisions. Two-hundred and fifty subjects learned and made judgments about two act to outcome contingencies under two levels of risk and three levels of ambiguity. They then made resource allocations to acts for which they had judged the contingencies.
The results clearly indicate that uncertainty has separate and distinct effects on judgments and resource allocation decisions. Specifically, contingency functions learned under certain conditions were perceived as being far more linear than the actual function forms. Furthermore, when compared to optimal allocations based on the individual's own judgments, individuals show preference toward allocating resources to acts for which the functional relation is more certain. Thus the assumptions of contingency theorists were violated. The need for further investigation into decision processes under uncertainty is discussed.
Issue Date:1987
Description:173 p.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1987.
Other Identifier(s):(UMI)AAI8803191
Date Available in IDEALS:2014-12-15
Date Deposited:1987

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