The Relative Importance of Probabilities, Outcomes, and Vagueness in Hazard Risk Decisions

This study investigated the joint effects of vagueness on both the probability and the outcome dimensions of hazard risk, using both pairwise choice and rating response tasks. Seventy-two subjects evaluated risk stimuli (concerning either environmental or health hazards), which varied in the level of probability of loss, the amount of loss, and the precision with which each dimension was specified. We found strong evidence of a consistent individual attitude toward vagueness on both risk dimensions and an almost equal number of vagueness-seeking and precision-seeking subjects. Choices were consistent with a decision rule based on dimension preference, but attitude toward vagueness significantly predicted choice in cases where a dimension preference rule was not appropriate. An asymmetric preference reversal pattern was also demonstrated, with many subjects choosing an option in a pair that they rated as more risky.