Decision making under uncertainty: preferences, biases, and choice

Rosati, A. G. (2017). Decision making under uncertainty: preferences, biases, and choice. In: APA Handbook of Comparative Psychology, Volume 2. (J. Call, ed.). American Psychological Association, pp. 329-357.

[PDF]  Abstract

Imagine a choice between two potential jobs: a position that is stable but intellectually mundane, or one that is more exciting but offers only short contract with some chance of renewal. These kinds of decisions can be agonizing because they involve uncertainty. While the first job option is a known quantity, the second job offers the possibility of being more fulfilling, but also the possibility of being let go in the near future. This uncertainty means that it is not possible to know the exact consequences of the decision in advance, making it difficult to judge the best course of action. Many important decisions involve this same sort of uncertainty—such as whether to invest in a new business, commit to a partner, or pursue a medical treatment. Yet uncertainty is not something only humans experience: it is pervasive in the natural world, and all animals must sometimes make decisions without complete information about the consequences of their actions. Consequently, illuminating how decision-makers respond to uncertainty is a problem of interest across both the social and biological sciences. This review will integrate theory from economics, psychology, and biology in order to understand the psychological mechanisms that animals use to make decisions under uncertainty, as well as what biological function these mechanisms might have. I further argue that comparative research is a powerful tool for understanding the nature of economic decision-making. Discovering that a particular decision-making pattern is widely shared across humans and other species—or conversely, unique to humans alone—can provide important insights about the types of experiences that engender these psychological processes.