Using Means Objectives to Present Risk Information

In: Decision analysis: a journal of the Institute for Operations Research and the Management Sciences, INFORMS, Band 13, Heft 2, S. 117-127

Abstract

When making decisions involving alternatives with risk, individuals are often unable to express or view the possible outcomes in terms of a fundamental objective. In many cases, using a means objective is more practical or more accessible. However, to apply information about a means objective correctly, a decision maker must first translate it into information about a fundamental objective. This paper presents and discusses the results of two experiments regarding decision makers' preferences and decision process when information is presented either in terms of a means objective or a fundamental objective. We find that individuals are somewhat more likely to choose a risky alternative when information is expressed in terms of means objectives than in terms of fundamental objectives, and that this difference is not significantly smaller among individuals with greater quantitative ability. Individuals are also better able to articulate their decision process when given information related to fundamental objectives than they are with information related to means objectives. In addition, we find that individuals who focus on the uncertainty involved in a decision are more likely to choose a sure thing, whereas individuals who focus on consequences are more likely to choose a gamble.