Accession Number : ADA111656

Title :   Multiattribute Risky Choice Behavior: The Editing of Complex Prospects.

Descriptive Note : Technical rept.,

Corporate Author : DUKE UNIV DURHAM NC GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

Personal Author(s) : Payne,John W ; Laughhunn,Dan J ; Crum,Roy

PDF Url : ADA111656

Report Date : Feb 1982

Pagination or Media Count : 40

Abstract : This investigation draws upon concepts from prospect theory and multiattribute utility theory in an examination of the multiattribute risky choice behavior of 128 managers. The question of how managers code multiattribute prospects, and how coding relates to various independence assumptions, was explored. Results indicate that managers violate attribute independence in its general form, and in the form of the marginality assumption. The most common form of behavior was multiattribute risk aversion for prospects involving only gains and multiattribute risk seeking for prospects involving only losses. This result reinforces the importance of a target, reference point, or aspiration level that has been found in studies of single attribute risky choice. Furthermore, the result casts doubt on such commonly used multiattribute utility functions as the additive, multiplicative, and multilinear forms. Event independence, necessary for expectation models and a consequence of the cancellation of common components of prospects, was found to hold when the common values and probabilities were relatively small. When the common event had relatively large values and probabilities, there was some evidence that such events may influence choice.

Descriptors :   *Decision making, *Risk, *Decision theory, *Behavior, Management, Judgement(Psychology), Coding, Supervisors, Attitudes(Psychology), Gambling, Probability, Gain, Losses, Test methods

Subject Categories : Psychology
      Operations Research

Distribution Statement : APPROVED FOR PUBLIC RELEASE