Thinking and Deciding

286 DESCRIPTIVE THEORY OF CHOICE UNDER UNCERTAINTY
following scenario (Tversky and Shafir, 1992a): “Imagine that you have just taken a
tough qualifying examination. It is the end of the fall quarter, you feel tired and rundown,
and you are not sure that you passed the exam. In case you failed you have to
take the exam again in a couple of months — after the Christmas holidays. You now
have an opportunity to buy a very attractive five-day Christmas vacation package
to Hawaii at an exceptionally low price. The special offer expires tomorrow, while
the exam grade will not be available until the following day.” Subjects were asked
whether they would buy the package, not buy it, or “pay a $5 nonrefundable fee in
order to retain the rights to buy the vacation package at the same exceptional price
the day after tomorrow — after you find out whether or not you passed the exam.”
Sixty-one percent chose to pay the $5. Only 32% would buy the package. When
asked what they would do if they knew that they had passed or knew that they had
failed, however, most subjects would buy the package in each condition, and only
31% would pay $5 to delay the decision for two days. It seems that people would
take the vacation to celebrate, if they passed, and to gather their strength if they
failed, but, if they did not know their reasons, they preferred not to decide until they
did.
A similar tendency to defer decisions or to “do nothing” results from conflict, that
is, from having reasons to choose or reject more than one option (Tversky and Shafir,
1992b). For example, in one experiment, subjects had filled out a questionnaire and
expected to be paid $1.50. Half of the subjects were offered a metal pen worth about
$2 instead of their payment, and only 25% of these subjects took the $1.50, the rest
taking the pen. The other half of the subjects were offered a choice of the same pen
or two plastic pens. Now 53% of these subjects took the money instead of either of
the other options. As in the vacation study just described, people need clear reasons
to abandon the default option: delaying the vacation decision or taking the money.
The heuristic of not acting without reasons is, of course, generally a good one. But
if you would take the same action in all possible states of the world — despite the
reasons being different in different states — then you might as well decide to take it.
You do have reasons, although your reasons may not be known yet.
Conclusion
We have seen in this chapter that several factors — not all fully understood — lead
us to violate expected-utility theory in its simple form. Some apparent violations,
such as those caused by regret or disappointment, are not necessarily violations at
all. In these cases, an overly simple analysis could have neglected real emotional
consequences of decisions. It is also possible, however, that we sometimes fail to
consider the option of trying to control our emotional responses in order to achieve
our remaining goals.
Other violations of the theory, such as ambiguity effects, might result from our
using generally useful heuristics in situations in which they are harmful rather than
helpful in achieving our goals. Such biases can result from “heuristics based on