ABSTRACT
The literature relating decision processes and strategies to the complexity of the decision environment is extensive and relates mainly to laboratory-based investigation. A principal focus is how much complexity modifies the decision process in terms of the extent of analysis of decision-relevant information by the decision-maker. A general finding is that increased complexity is consistent with proportionally less exhaustive analysis, a tendency to switch from compensatory to non-compensatory decision processes and a propensity to employ heuristics and biases in forming judgements (see, for example, Kahneman et al., 1982; Keren and Wagenaar, 1985; Onken et al., 1985; and, for an extensive review of earlier work, Ford et al., 1989). Unsurprisingly, these observed behavioural modifications may carry penalties in terms of decision performance (see, for example, Jacoby et al., 1974; Jacoby et al., 1975; Paquette and Kida, 1988). In terms of risky decision-making in particular, a number of studies (Meyer, 1981; Curley et al., 1986; Frisch and Baron, 1988; Ritov and Baron, 1990) contain discussions of the risk associated with complex decision settings. The notion of ‘ambiguity avoidance’ is significant here, in explaining both participation in risky decision-making and decision selection. On the issue of participation, Frisch and Baron (1988) focus on the notion of ambiguity as ‘missing information’; this allows them to develop a number of rationales for the avoidance of ambiguity, which reinforces the earlier work of Einhorn and Hogarth (1986). On decision choice, Curley et al. (1986) suggest that the ease of justifying the decision to others (‘other evaluation’) may be a dominant factor in rejecting ambiguous choices under conditions of risky decision-making.
