Doctoral Dissertation Research in DRMS: Decision Research on Time, Risk, and Ambiguity

University Of California-Irvine, Irvine CA

Investigators

Abstract

Researchers have studied decision making when outcomes occur in the future (intertemporal decision making), when outcomes occur with stated probabilities (risky decision making) and when outcomes occur with ranges of probability (decision making under ambiguity.) In this Doctoral Dissertation Improvement Grant, the co-PI extends these lines of research in two directions. One set of experiments examine the impact of an ambiguous temporal distance on an individual's choice behavior. Specifically, the research will answer the question: how do people treat a future outcome occurring during an ambiguous time span? Four experiments with real payoffs will be used to address this question. A second set of studies examines how time delays influence the perception of risky consequences. Subjective reactions to risky events may depend on how far into the future the anticipated risks are perceived (e.g. next year or 10 years from now). Two laboratory experiments will be conducted on people's perceptions of risks with short or long temporal distances, to explore how the saliency of factors like the probability or magnitude of losses change over time. This research promises to provide a useful framework for evaluating future outcomes in terms of both preference and perceived risk. In terms of broader impacts, it will be helpful in communicating risks on crucial future consequences such as trends of an economy and anticipated personal benefits/risks. It will also potentially help in project management practice with respect to time management and design of compensation packages. Finally, it will promote the accuracy of the general public's judgments of future risks, and also motivate appropriate reaction to future risks.