Luck be a Lady
INFLUENCES THAT AFFECT OUR DECISIONS ABOUT UNCERTAINTY
What makes up our behavior? How do you fit in with one group of people and not the other? In Robyn Dawes book Rational Choices in an Uncertain World, he points out an important study titled “Measuring Utility of Money through Decisions” by C.H. Coombs and S.S. Komorita. In this article, researchers state that behavior is largely looked upon as a series of decisions.
A person’s behavior can influence how much risk they are willing to take on any one decision. Coombs and Komorita concluded that a person would always try to maximize the value of their chance, especially if they have measured the “utility” of their bets. Betting is the most common way to test decisions having to do with uncertainty. After their own testing, researchers concluded “that an individual’s preferences among 50-50 bets can be explained and predicted in terms of his utility for money if an assumption regarding probability is satisfied.” (p. 388).
Conversely, Coombs and Komorita deduced that even in imaginary test situations, humans would rather not bet at all on an uncertain decision rather than taking the chance on uncertainty. It’s how we value what we have that influence our decision to take a risk, which eventually will turn into our behavior.
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Text Credit: C.H. Coombs; S.S. Komorita, The American Journal of Psychology, Vol. 71, No.2, (Jun., 1958), pp. 383-389.