Small Decision Making Under Uncertainty And Risk
Fujikawa, Takemi Small Decision Making Under Uncertainty And Risk. Working Paper. Universiti Sains Malaysia. (Unpublished)
We everyday engage in the "Small Decision Making (SDM)", This paper presents an experiment on SDM that consists of the two treatments: (1) the search treatment in the context of SDM under uncertainty, where the decision makers are not disclosed the payoff structure; (2) the choice treatment in the context of SDM under risk, where the decision makers are not disclosed the payoff structure. The participants of the experiment participate in the search treatment first, then the choice treatment subsequently. The basic task is binary choice among two alternativesone is risky but higher EV and the other is safe alternative with lower EV- with the repetition of hundreds of trials. In the search treatment, the decision makers first make their choice without receiving any prior information on the possible outcomes and probabilities. In the choice treatment, the decision makers are informed of the information on the payoff structure.
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