UC San Diego

Decision-makers often are faced with uncertain situations in which they have incomplete information. While risky decisions include the probabilities of the possible outcomes, ambiguous decisions involve both unknown probabilities and unknown outcomes. Prior research has suggested that there are differences in how men and women evaluate risk, but evidence related to gender and ambiguity is mixed. The present work approaches this problem from a novel angle, focusing on the use of information that is present rather than the impact of information that is absent. It examines how individuals assign value in uncertain decisions based on the partial information they do have. While a main effect of gender on value is not observed, there is an enhanced optimism bias in how both favorable and unfavorable information influences the subjective value of ambiguous financial prospects for male compared to female participants. Unpacking these effects suggests multiple mechanisms, including a significant contribution of risk processing. Specifically, favorable and unfavorable information are over- and underweighted respectively in male participants estimated likelihood of a winning outcome, and unfavorable information is underweighted in estimating certainty. There also is an interaction of gender and risk preferences, such that value increases more for male participants as the subjectively estimated likelihood of winning increases. A second experiment demonstrates this risk interaction effect is also observed for objective probabilities of winning, suggesting that the relationship between value and risk uses similar mechanisms across layers of uncertainty.