Judgment and Decision Making (Jun 2007)
The skill element in decision making under uncertainty
Abstract
Many natural decisions contain an element of skill. Modern conceptions of the skill component include control (Goodie, 2003) and competence (Heath and Tversky, 1991). The control hypothesis states that a task's skill component (the sensitivity of the task to skill) affects decision making; the competence hypothesis states decision making is affected only if the participant possesses the skill. Three experiments compared risk taking patterns between two groups. One group faced bets on random events, and another group faced bets on their answers to general knowledge questions, which is a task characterized by control. In Experiment 1, control increased risk taking markedly with all statistical properties held constant. In Experiment 2, decisions made in domains of varying difficulty, and by individuals of varying ability, yielded further qualified support for the role of competence. In Experiment 3, the role of control was replicated, and participants' perceptions of the differences in group treatments aligned more with the implications of the control hypothesis than with the competence hypothesis. Results offered support for the control hypothesis across a range of competence.
