Risk-perception and risk-evaluation in the no-data-decision-making-situations  [presentation, ppt, 285 kB]

Fenzl T., Brudermann T.
First author's affiliation: Institute of Psychology, Department for Economic Psychology, Klagenfurt, Austria

In situations of uncertainty, for which people do not have any experiences, they seek for information in their environment, on which they can base their expectations. The concept of other-directedness (Riesman, 1952) implies that there are numerous situations in which people do not solely base their decisions on facts but rather react to the behavior of others. Evidence can be found by creating uncertainty or disorientation, panic or euphoria and by providing an environment that suggests explanations (Schachter & Singer 1962). To investigate the effects of other peoplesĀ“ behavior on perception and evaluation of risk our experimental design registered the risk-behavior of students in an oral exam under particular conditions. As a novelty we offered participants (n=59) to choose between an examiner, who is generally known at campus for risky and unpredictable exams, and an examiner who never took exams before. Our objective was to observe the different behavioral strategies in order to manage this situation. We focused on whether participants would perceive and evaluate risk using the behavior of other students passing the exam before them and to which degree a suspected bad performance of the first few candidates would influence their behavior. In this risky situation, where information is lacking and canĀ“t be acquired from the environment, the majority of students rather chose the known evil than going for the completely unfamiliar alternative. Nevertheless one third of the students trusted in their abilities or the subjective appraisal of their skills and opted for the unfamiliar examiner. Faced with the bad outcome of the first few candidates taking the exam with him, a majority of the remaining participants that had originally chosen this alternative were rethinking their decisions, using the outcomes of these others to evaluate the risk faced anew, and 17% reversed their choice. Therefore the behavior and actions of other people in the environment plays an important role in perceiving and evaluating risk.