Individual Decisions Concerning the Allocation of Resources for Projects with Uncertain Consequences

Claus C. Berg
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Claus C. Berg: Universität Mannheim

Management Science, 1974, vol. 21, issue 1, 98-105

Abstract: Individual decision making behavior under uncertainty is queried by experiments. The subject's task is to allocate resources for projects with transformation results about which only uncertain expectations exist. The purpose is to get some insight into the information processing which determines the choice of an allocation rate. The data contradict any predictions based on a SEU model of decision making behavior under uncertainty. An heuristic information processing model is built which possesses better empirical validity than the SEU model. The model provides an alternative to Atkinson's theory, for it is demonstrated that individuals show both typical and atypical reactions in dynamic interaction. The variable `situation of an individual' is defined which provides a mechanism to explain the observable switch in the priority ordering of needs.

Date: 1974
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