Aided and Unaided Decision Making With Imprecise Probabilities

We report results of a series of experiments on decision-making in the presence of irreducibly imprecise probabilities. The choices faced by the subjects resemble loosely the policy choices faced by policy makers in the presence of the threat of abrupt climate change. Consistent with the vagueness avoidance hypothesis, subjects displayed systematic preferences for riskless actions even at a high premium. This tendency increased as a function of the level of vagueness, characterized by the width of an interval of plausible probabilities. The vagueness avoidance tendency was reduced significantly when the subjects had access to one of two different decisions aids with distinct approaches to imprecision. The “Summary” aid provides quantitative comparisons of expected values of alternative actions while the “Display” aid graphically compares the performance of actions over the entire range of plausible probabilities. Although the decisions made in the presence of the two decisions aids were very similar in most respects, we found evidence for an interaction between the presentation format (operationalized by the type of decision aid used) and the subsequent decisions. Exposure to the graphical displays caused more subjects to favor the action that was perceived as superior for larger portions of the probability range, compared to subjects who had access to an expected value calculator. These findings suggest some initial implications for the debate over how to best characterize imprecise probabilistic information for policy-makers involved with climate change.