On the Antecedents of Rational Choice Under Uncertainty

Abstract:     
For centuries, people have speculated on the factors that promote rational, consistent decisions in face of uncertainty. The current research contributes to this discussion by investigating the role of cognition in decision making consistency under uncertainty. We find that restricting cognitive resources can have the counter-intuitive effect of promoting more consistent responses and that, conversely, encouraging cognition can engender the opposite result. We discuss the different psychological processes that may underlie these results, as well as how these results may help explain conflicting findings regarding responses to uncertainty in general.

Number of Pages in PDF File: 17

Keywords: uncertainty, processing style, uncertainty aversion, Allais Paradox

working papers series