The effects of behavioral and outcome feedback on prudent decision-making under conditions of present and future uncertainty

Abstract

One of the largest reasons decision-makers make bad decisions (act imprudently) is that the world is full of uncertainty, we feel uncertain about the consequences of our actions. Participants played a repeated game in which decisions were made under various types of uncertainty (either no uncertainty, uncertainty about the present consequences of behaviors, uncertainty about the future consequences of behavior, or both types of uncertainty). The game required prudent decision making for success. While playing the game one of three types of feedback was placed between trials, either no feedback, behavioral feedback, or behavioral plus outcome feedback. Prudent decision-making decreased when both types of uncertainty were added. Further, the addition of feedback increased prudent decision-making when future uncertainty was present. The increase in prudent decisions appears to be from feedback's ability to allow us to create probabilities associated with behaviors and their consequences, implying that anything that reduces the uncertainty people feel in a world full of

Keywords

• uncertainty
• decision-making
• feedback
• prudence
• humanexperimentation