A further exploration of the uncertainty effect

Wang, Y; Feng, T; Keller, LR

A further exploration of the uncertainty effect

Wang, Y

Feng, T Keller, LR

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Publication Type:: Journal Article
Citation:: Journal of Risk and Uncertainty, 2013, 47 (3), pp. 291 - 310
Issue Date:: 2013-11-19

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Field	Value	Language
dc.contributor.author	Wang, Y https://orcid.org/0000-0002-3040-7755	en_US
dc.contributor.author	Feng, T	en_US
dc.contributor.author	Keller, LR	en_US
dc.date.issued	2013-11-19	en_US
dc.identifier.citation	Journal of Risk and Uncertainty, 2013, 47 (3), pp. 291 - 310	en_US
dc.identifier.issn	0895-5646	en_US
dc.identifier.uri	http://hdl.handle.net/10453/31980
dc.description.abstract	Individual valuation of a binary lottery at values less than the lottery's worst outcome has been designated as the "uncertainty effect". Our paper aims to explore the boundary conditions of the uncertainty effect by investigating a plausible underlying process and proposing two possible methods. First, we examine how providing an exogenous evaluation opportunity prior to judging the value of the lottery affects individuals' judgments, and find that first valuing the worst outcome and then the lottery eliminates the uncertainty effect. Second, we explore whether introducing additional cognitive load dampens how far decision makers correct their initial evaluations, and find that additional cognitive load is able to eliminate the uncertainty effect. © 2013 Springer Science+Business Media New York.	en_US
dc.relation.ispartof	Journal of Risk and Uncertainty	en_US
dc.relation.isbasedon	10.1007/s11166-013-9180-x	en_US
dc.subject.classification	Economics	en_US
dc.title	A further exploration of the uncertainty effect	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	47	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Marketing Discipline
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	47	en_US

Abstract:

Individual valuation of a binary lottery at values less than the lottery's worst outcome has been designated as the "uncertainty effect". Our paper aims to explore the boundary conditions of the uncertainty effect by investigating a plausible underlying process and proposing two possible methods. First, we examine how providing an exogenous evaluation opportunity prior to judging the value of the lottery affects individuals' judgments, and find that first valuing the worst outcome and then the lottery eliminates the uncertainty effect. Second, we explore whether introducing additional cognitive load dampens how far decision makers correct their initial evaluations, and find that additional cognitive load is able to eliminate the uncertainty effect. © 2013 Springer Science+Business Media New York.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/31980