Pragmatic approach to decision making under uncertainty: The case of the disjunction effect

Authors: Bagassi, Maria; Macchi, Laura

Source: Thinking & Reasoning, Volume 12, Number 3, August 2006 , pp. 329-350(22)

Publisher: Psychology Press, part of the Taylor & Francis Group

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Abstract:

The disjunction effect (Tversky & Shafir, 1992) occurs when decision makers prefer option x (versus y) when knowing that event A occurs and also when knowing that event A does not occur, but they refuse x (or prefer y) when not knowing whether or not A occurs. This form of incoherence violates Savage's (1954) sure-thing principle, one of the basic axioms of the rational theory of decision making. The phenomenon was attributed to a lack of clear reasons for accepting an option (x) when subjects are under uncertainty. Through a pragmatic analysis of the task and a consequent reformulation of it, we show that the effect does not depend on the presence of uncertainty, but on the introduction of non-relevant goals into the text problem, in both the well-known Gamble problem and the Hawaii problem.

Document Type: Research article

DOI: http://dx.doi.org/10.1080/13546780500375663

Affiliations: 1: Università degli Studi di Milano-Bicocca, Italy

Publication date: 2006-08-01

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