Effects of risk and ambiguity on judgments of contingency relations and behavioral resource allocation decisions

Abstract

Motivation has been defined as the allocation of time and effort across competing demands. Such resource allocation problems are made more difficult when the relationships between activities and desired outcomes are uncertain. Cognitive theories of motivation assume that individuals make judgments about the associations of specific activities with desired outcomes, then choose actions based on those judged associations. These theories assume that uncertainty affects the judgments of the associations, but not the decision based on those judgments. However, recent research on decision theory with binary choices suggests that uncertainty has separate and distinguishable effects on judgments and on the choices made based on those judgments. In a laboratory experiment subjects learned two act-to-product contingencies under two levels of risk and two levels of ambiguity. The contingencies were judged as more linear than the actual contingencies when learned under uncertain conditions. Furthermore, decisions to allocate time across the two activities were biased in the direction of the more certain associations. This research extends the literature on risk with gambles and provides some additional insights into the way which judgment and decision processes differ. Implications for behavior change in industry and future research directions are discussed.