Perceptual accuracy and conflicting effects of certainty on risk-taking behaviour

Sharoni Shafir, Taly Reich, Erez Tsur, Ido Erev () and Arnon Lotem ()
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Sharoni Shafir: B. Triwaks Bee Research Center, Faculty of Agricultural, Food and Environmental Quality Sciences, The Hebrew University of Jerusalem
Taly Reich: Max Wertheimer Minerva Center for Cognitive Studies, Faculty of Industrial Engineering and Management, Technion, Haifa 32000, Israel
Erez Tsur: B. Triwaks Bee Research Center, Faculty of Agricultural, Food and Environmental Quality Sciences, The Hebrew University of Jerusalem
Ido Erev: Max Wertheimer Minerva Center for Cognitive Studies, Faculty of Industrial Engineering and Management, Technion, Haifa 32000, Israel
Arnon Lotem: Faculty of Life Sciences, Tel-Aviv University

Nature, 2008, vol. 453, issue 7197, 917-920

Abstract: The certainty effect: Experience counts The certainty effect (or Allais paradox) is one of the most important paradoxes in the behavioural and social sciences. It holds that people and even animals tend to select the safer of two prospects, even though it may not be the more rewarding, if this ensures a good outcome with certainty. The effect appears counter-intuitive and its underlying mechanisms are not clear. A set of experiments designed to clarify the situation — using human volunteers rewarded with money and honeybees rewarded with sucrose — is reported in this issue. They provide a simple and novel explanation. The results fit a simple process-based model of matching behaviour capable of explaining the certainty effect in humans and other animals that make repeated decisions based on experience. The certainty effect emerges when it is difficult to discriminate between the different rewards, whereas reversed certainty emerges when discrimination is easy.

Date: 2008
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DOI: 10.1038/nature06841

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