Journal of Risk Uncertain 1015-35 (185) (© 1985 Kiuwer Acacemic Publishers Decision Making under Ignorance: Arguing with Yourself ROBIN M. HOGARTH Uninet of Chzag, Graduate Schoo of Business, 101 Eat SB Se, Chop IL. 60637 HOWARD KUNREUTHER Univers of Pomnvoni, Wharton Schoo, 1303 etry HollDerich Hal, Pdepia PA 1146386 Keywords: ambiguity, ucertsnn rk ignrance copie processes Abstract ‘Themetaphor of gambling hasiad great influence on he topic ofehoie under uncertain. However. a many eabworld Siuaors. people mas make choices When hey lack informston aboat the relevant sonore Features of gambles. 1, probabaes snd oucores. We eer ois as choice under ignorance es opposed 0 coe ander rak or ancertany. We propse that people hare these dec by generating retake or ‘srpumensthat allow tem toresoWeIhechoise confit Moreover. hes aioealesefien donot correspond to ‘Principles derived fromthe cos-bereiframenonk of economic models These Meas are explored in vo {xperimente in which subjects simulated the purchase of warranes for consumer durables. Our principal findings are fr, that observable Dehovors Sif Det stations where subjects do and do ret have {nformationon probable ac ctcomes Secon economic ot-beneht mode id not ils good seri ont of cursabjecs’ deans Third, he natere of arguments wed and tush process imeked, cieree tea funccion ofthe information avails to subjects And fourth, bye arpuments incicated to pes of sirtepies fr reaching ecsons. none. they rocese the particular characteristics of each choice option: in {he oer. hey inked 2 ~metarule" or rine ta esolved the choice ean: anc was insensiie 1 the particule features of ferent cpions. Finaly. we dscus ibe impicaions ofour resus Tas irciuces ques Uioning she appropriateness sing the eumble as a metaphor for choice in future research. 1. Introduction Consider the following senso: you are the proud osiner of a VCR that you have just purchased ata local store. On completion ofthe sale, you are suddenly confronted with Aa question by the selesperson as 1o whether you want to buy @ warranty at a particular price. However, you hve essentially no information on the chances thatthe machine will fail and the likely costs of repair. How do you decide? The siandard paradigm of choice requires individuals to state their preferences between alternatives characterized by wellspeciied probabilities and outcomes (Kleindorfer, Kunreuther, and Schoemaker, 1993). Thus, the decision should be based16 ROBIN M, HOGARTHHOWARD KUNREUTHER ‘on a comparison of the price of the warranty with the expected cost of repairs (Le. the ‘chance of a breakdown and the resulting repair bill). However, what happens when you have no real notions ofthe probability of breakdown or the cost of repairs? In this article, we explore choices similar co these where people have very litle infor- ‘mation about the economically relevant variables. We refer to these situations as involv- ing states of ignorance, even though we acknowledge that true states of ignorance are rare, because individuals typically have some information about the likelihood and con- sequences of specific events (see also Coombs, Dawes, and Tversky, 1970), We propose that, under ignorance, people determine choices by using arguments that, {do not quantify the economic risks and may reflect concerns that are not part of standard. ‘choice theory. For example, in the warranty scenario, a person might focus solely on the reputation of the manufacturer (“A good manufacturer doesn’t need to give a wer- ranty”),a desire for peace of mind (“T'd sleep easier with a warrenty”), or fear that the salesperson is taking unfair advantage of the customer (“If they charge that much, they ‘must be making money, so I guess its overpriced”). Recently, there has been growing interest in enriching the standard paradigm by considering situstions in which subjects are provided with vague or ambiguous informa- tion about probabilities and/or outcomes. In fact, the literature now contains many examples of the effects of ambiguous probabilities in both laboratory tasks and real- ‘world contexts (Camerer and Weber, 1992). In this article, we propose to extend this ‘work, as illustrated in figure 1 Figure 1 depicts the conceptual differences between decision making under risk, am= biguity, and ignorance. The Knowledge: Probabilities Precise Ambiguous None Losses (Ignorance) Precise 1 2 3 cn — satines | rears Ambiguous | 3 6 patisinstrese | antime | Ants scones | inne None 7 8 9 (ignorance) Ireracerrcse | amis | tromce feat | rene iene 1. Characer2aton of decon-mating stationsDECISION MAKING UNDER IGNORANCE a individual can be characterized on a continuum ranging from precise (ic. risk or knowl- edge of probsbilties and outcomes) to none (ie. ignorance or lack of knowledge about probabilities and outcomes). To simplify this representation, we have divided the prob- ability and outcome dimensions into three zones denoted “Precise,” “Ambiguous,” and “None (Ignorance).” respectively. By crossing the two dimensions, we obtain nine dif- ferent situations. Cell 1 (“Precise-Precise")! hasbeen the most widely studied. Both explicit probabili- ties and payotis are provided to decision makers. Cell 2 ("Precise-Ambiguous”) has been the focus of recent studies on ambiguity of probabilistic information where out- comes are wellspecified. This has been made operational in experimental studies by providing subjects with probabilistic information in the form of ranges of values (see, ¢g, Curley and Yates, 1985), point estimates with considerable uncertainty surrounding the Value (Eintorn and Hogerth, 1986; Hogarth and Kunreuther, 1989), and predictive tasks where people believe they possess specific competence for making estimates (Heath and Tvershy, 1991), Recently, a study of insurer behavior where both the probabilities and the losses are ambiguous (Cell 5) has been completed (Kunteuther et 21, forthcoming)? We are not aware of other studies which have looked a the impacton choice in Cell Sor the other six cells in igure 1, even though they may be representative of many real-world decisions. In this article, we focus on comparisons between Cells { and 9 through controlled ‘experiments on warranty purchases such 2s the scenario deseribed at the outset of this antcle, Our studies were designed to investizate three issues: 1. Does the likelihood of individuals purchasing warranties differ under conditions of ignorance (Cell 9) and risk (Cell 1)? 2. Do people use different decison processes under conditions of ignorance and risk? 3. What types of arguments do subjects use in their decision process when presented with either no information or precise data onthe risks? ‘With respect tothe first issue, we conjectured that the greater uncertainty associated with Cell 9 would lead to a higher probability of purchasing the warranty than in Call Because ignorance represents an extreme form of ambiguity, this hypothesis follows from the work on ambiguity which documents grester aversion to taking risks under ambiguity (Camerer and Weber, 1992). A sub-issue related to this question was how the price ofthe warranty and the reliability of the product affect the probability of purchas- ing the warranty under concitions of ignorance and risk. We hypothesized that both cheaper prices (for warranties) and lower reliability (ofthe products) would increase the likelihood of purchasing warranties. 5: "not buy” for expressed probabili- ties < .5: and “undecided” for expressed probabilities =.5. In fact, there were few undecided, so we ignored this category in the subsequent analysis.!? Examining the four arguments withthe greatest frequencies in table 4 (1d, Ila, 11b,and Illa), we found some evidence that particular types of arguments were predictive of purchase intentions. Under conditions of risk. “Breakdown probability” (Id) was heavily associated with “not buy” decisions in Experiment 2 (14 versus 2 with 3 “undecideds”), but not in Experiment | (13 versus 12 with 3 “undecideds”). “Warranty price and ex. pected or absolute repair costs” (IIb) was used about twice as frequently by “not buys” than “buys” in both Experiments 1 and 2 (20 versus 12, and 25 versus 11).B ROBIN M. HOGARTHHOWARD KUNREUTHER 38. Types of processing strategies Itis typically assumed in many studies of decision making that subjects use aspecifc rule or strategy for making decisions. However, considerations of the range of arguments summarized in table 4 suggests that different types of rules could have been used. After studying the arguments provided by subjects, we formed the hypothesis thet two general 'ypes of strategies were being used ‘One is what we call a*meta-strategy.” This takes little account ofthe specifi charac. teristics of stimuli, but, instead, uses some higher-order rule to solve the choice problem. ‘An example wouldbe the use ofa regret argument such as “I would regret not buying the ‘warranty should a breakdown oceur,”or a principle a person has formed to handle these kinds of situetions such as “I never buy these types of warranties.” An important feature of a meta-strategy is that, although the use of the strategy is triggered by the stimulus ‘encountered, itis not responsive to detailed features of the stimulus. The followingis an example of a meta-argument provided by one subject: “I seldom buy warranties, prtic- ularly ifT ust the model enough to buy it inthe first place.” Jn operational terms, the meta-arguments are those classified under “General meta- rules” and “Regretipeace of mind” (IfIb and Ile) in table 4. Moreover, as can be seen from table 4, the use of mete-strategies did not vary between conditionsof ignorance and risk. The frequencies are 1Oversus 11 in Experiment I, and 16 versus 15 in Experiment 2. ‘The numbers of subjects using these kinds of arguments were 16 out of 62in Experiment 1.and 22 out of 65 in Experiment 2. We classified these subjects as “meta-users.” In contrast, a non-meta-srategy is more responsive to the detailed features of the stimulus. For example, it may take specifically into account the estimated probability of a breakdown and/or the cost of repairs. An example of this reasoning provided by one subject was “Expected repair expense was less than $20, but price of insurance wes $80." In operational terms, these strategies are exemplified by all the argument classifications in table 4 except IIIb and Ile. The numbers of subjects who were non-meta-stratexy users were 46 (out of 62) and 43 (out of 65) in Experiments 1 and 2, respectively. ‘Did the fact that someone was a meta-user affect purchase intentions? Our data show that this did oecurin Experiment 1, but rot in Experiment. Specitically in Experiment 1 the overall mean probability of purchase (avereging across both products and stages) \was.73 for the meta-users and 1 for the non-meta-users. For each product across both conditions of ignorance and risk, means for the mete-users were larger and significant in five out of eight cases (p < .05). As noted, this pattern did not replicate in Experiment 2. 3.9. Analisis 3b: Responses to structured! argurtents In addition to the free-form arguments discussed above, we also asked subjects to specify the extent to which they had used arguments that we explicitly provided." These argu- ments were presented afier subjects indicated their choices for the second of the four scenarios at each experimental session, the free-form arguments having been provided after information was elicited on purchasing a warranty for the first product,DECISION MAKING UNDER IGNORANCE. 2» ‘Whereas analyzing the ratings of argumeats provided by the experimenters should be regarded with caution when trying to ascess subjects’ underlying decision processes, i iS instructive to see whether these dats are consistent with the free-form arguments. Table 45 shows the 20 arguments rated by subjects and the mean ratings essociated with the two ‘Stages (ignorance and risk) ofthe two experiments. In the experiments, “reasons to buy ‘were presented before“ reasons no! 10 buy.” Intabe S, we have reordered the arguments to create groups of meta- and non-meta-erguments both for and against buying the warranty. The numbers associated with each argument indicate the order in which they were presented. From table 5 it can be seen that different weights are given to some ofthe arguments between conditions of ignorance and risk in Experiment 1. In particular, the regret argument for buying warranty (4) is rated much higher under ignorance as opposed to risk (639 versus 4.98, 1 = 3.61, p < 001); there are also significant differences for arguments 15 and 18 (meta-arguments not to buy), as well 2 some differences on non- meta arguments to buy. ‘A particularly interesting difference is provided by argument 17, where itis seen that the tradeoff argument (“The cost of the warranty is high relative to the chance of some- thing going wrong’) is rated much higher under risk than under ignorance (5.95 versus 440.1 = =3.24, p < 01). This suggests that when information on probebility of failure is presented to subjects, they are much more likely to use this information in their reasoning process than under conditions of ignorance. As for Experiment, there is only one statistically significant difference (argument 1), and this imolves the comparison between the cost ofthe warranty and the price. infor ‘mation that is present under both ignorance and risk Table 6 examines the differences in weights given to structured arguments by mete and non-meta-users (as defined above). There is more consistency between the two experiments when this classification scheme is used, "As might be expected, meta-users place greater weight on meta-arguments to buy a ‘warranty than do non-meta-users, as shown by the mean scores for this category, 278 versus 4.70 and 2.37 versus 357, for Experiments | and 2, respectively (= — 4.04, < (O01, and 1 = ~2.63, p <.05). In Experiment 2, there is also a statistically significant difference (2.50 versus 3.97) between the use of meta-arguments for not buying the warranty (¢ = =274,p < 01). In addition, in Experiment 1, non-meta users rate on-meta-arguments “not to buy 2 warranty” higher than meta-users (4.73 versus 3.20,1 = 252,p <5), Takenasa whole, the weights given tothe rated arguments support the analysis of the free-form arguments. 3.10. Summary of experimental evidence (Our results support the hypothesis that people make different decisions under risk and ignorance. In both experiments, the increase in mean purchase intentions due to lack of Knowledge of probabilities and outcomes was about the same 2s that induced by halving the price of the warranties from 10% to 5% of the cost of the products.x0 [ROBIN M, HOGARTH/HOWARD KUNREUTHER Table Nem ratings ven o srguments provides Experiment Experiment? Terns Rik Ipvorance Rik ‘Remsonsto uy te warranny Metsangsment 2 Teypialybuy these ypescf waranty 3030228 4 aregret nt hang the warrany 63 ames ao) S37 if ther wac a beatdown, © asleep alot more securely with 2 lk 10 Tm unlucky My products aways sere 1k ‘oprah dows (mem) G4) GOH 27) GR) Noomete-argoments 1 The cos of the warranty seal relative 665 63h 60H to theprice (ofthe produc). 13. The cox of repairs (or replosement) would 697 S98 68600 ‘be mach higher tan the soto the 5, The proniemis nt cxpense. SB ST 56 506 6. The nature ofthe prodectissuch that SoS aw. ss porclar lel to break down, 7. Bren though the sho oss issal. dont 4550 ast 33s 3s want to charee i 68. The cost ofthe warranty in high lative 610 amt at 825 tothe chance of something gig wrong. 11, This products worth let t0 me Sm sue aay as (men) G92) 33D" 9) 492) -Reusens aot tobuy the warrany Merasargements: 12, rmlacy. Things like breakdowns doa't 20 sms seem to happen to me 1S, [don'ts insurance and warranties sa ass gas as “They con atays cover evening srt lore hao Keep track of lots paer. et. 18. usualy dontbuy warranties of ts ype 3s 2s 3038 2) Vs regret wasting money" on the arn) 30 amas Ruere warsaneesicione, (mean) G2) G7") GOH) [Non-moie-ergumerts 1. The nctre of the product such that it = wan ot ice obroak dow, 14, The warrants iseapensve relative othe sm 47) 3a 3 costo the product 16, The productisot won lotto me zoo sss 17, The costfthe warranty high relate ao See aes aes tothe chance ofsomething going wrong, 19. The premium expensive. ass aT ats 42688). G08) Nowe impliasp < 45, orp <DECISION MAKING UNDER IGNORANCE 3h Table, Mean ratings sven to arguments by nor-meta ae metasers Experiment Expernent? Norms Mem Newnes New a) Reasons io huy the waranty ‘Meta argumens 12 Tppiely by these peso warranty. 28 sm 4. Te rate not having the waren ass 376" if thore wae a bres, 9, Pealeepalot more securely With 2s aust the insurance, 10, Treualacly. Mypreducs alveys soom “a iz oe (ean) (278) ex) Nonmetwargsmens 1. The etl the mast ssl eve 60 6 SSS tothe price (ofthe product, 8, Theeostof reps er replecemest) 62656 50 would be much bigher tha the cost tthe warren, 5, The premium is ntexpensive. SG 6h Sma 66 The nature of te product such hat 37 508 ama its panicual elt break dona 7. Even though ters of oss smal, 3@ ste 30848 Ton’ want chance i 1 The cost ofthe warty i not bish 3 $8537 rele tothe chace of srmethine sone wrong. 11, Thisproductisworha lottome. 516 6084508 (rem) (34) (608) 08) 48) Reasons ot tobuy the waranty Meeseargument: 12 Ir ely. Things ke breakdowns don't 200s 200 seem to happen tome 15. Io" at ngarance and warseton 222265 “Thay don't always coer everyting and cone has tokeep track fats paper. 18 Ttwaly don’ buy waranies of hi yp rob 3003 20 Td regrt “wasting money" onthe 4036 aT kat samangifthersas in BrRdOe a) ogg) at) st) en Nonmete- arguments 18. The nature ofthe product issuck tha. 4m 946 itis not likey break down 14, The warranty isexpersive relate tothe 373M st of the pret 16, The pcduat snot worth ot tome 26 29 202 17. The ous ofthe waanyishigh relative 38 4042 tothe ohare ofsoreshing gens wrong, 13. The preniumis expense. 5 2st aa (man) 8) GS) GS) Nate implesp © 05," frp < Chand" orp < 0032 ROBIN M HOGARTHHOWARD KUNREUTHER Contrary to our expectations, cost-benefit models did not explain subjects’ choices ‘nell under conditions of risk. There are several possible explanations. First, subjects’ judgments were not reliable. Indeed, purchase intentions in the ris conditions corre- lated only 27 and .54 with subsequently expressed indifference prices in Experiments 1 and 2 respectively ‘Second, studies in which subjects’ judgments are modeled by regression techniques typically involve within-subject designs using mary stimuli. In our experiments, the mod. els involved many subjects and few stimuli, The predictability of our models would therefore be attenuated by between-subject variance. Moreover, ane could argue that because subjects were dealing with only a few stimuli embedded within a rich context, they might not have evolved “strategies” for use across a larger series of eases. The analysis of arguments associated with the decision process suggests that subjects facing reakworld tasks, as opposed to well-designed laboratory gembles, make decisions in \ways that are more idiosyncratic than. previously imagined. Subjects used a variety of arguments to describe their choices. ‘AS originally hypothesized, arguments under ignorance tend to focus on more nonquantifiable reasons than those used under risk. For example, tradeofls and other ‘multiple-attribute arguments were more common under risk even though the numbers of arguments used were about the samo under both conditions. Its perhaps ironic thet, under ignorance. when people should probably think harder when making decisions, they do not. In fact, they may be swayed bythe availablity of simple arguments that serve to resolve the conficis of choice. Examination ofthe free-form arguments suggests that subjects had at east two differ cent ways of approaching their choices, a meta-strategy that took little account of specific ccharacteristis of stimuli and ¢ non-meta-strategy that was more stimulus specif. More- over, the distinction between subjects who used meta- and non-mete-strategies was ‘upheld by our examination of weights given ( specific arguments for subsequent choices. ‘The use of specific arguments was not predictive of actual choices unless they were of the meta type. For example, a statement that a subject did not believe that consumer ‘warranties were worthwhile would clearly indicate not buying the warranty. On the other hhand, a comparison of the cost of the warranty with, say, the cost of the product or the expected cost of repairs did not predict direction of choice. Finally, because subjects in the ignorance condition of our experiments did make estimates of probebilties and costs (after their choices), it could be argued that their decisions were made under ambiguity as opposed to ignorance. We do not intend to join this debate, because our stimuli under ignorance were far more “ambiguous” than the stimulh used in studies of decision making under ambiguity (Camerer and Weber, 1992) However, we do wish to address a methodological criticism made by Heath and Tversky (4991) of previous studies of ambiguity effects. Heath and Tversky raised the possibility that differences in responses to ambiguous and nonambiguous stimuli may, at least in part, reflect regression effects rather than ambiguity per se. In the present article, recall that each subject in Experiment 1 wes faced with his or her own estimates of probabilities and outcomes at stage 2, and thus these values were equated, We did not rely on subjects inferring equality between probabilities and either (a) best estimates of values provided by a third party or (b) the midpoint ofa range of probability. In otherDECISION MAKING UNDER IGNORANCE words, the objections raised by Heath and Tversky were ruled out in this study and, yet, large ambiguity—or ignorance —effects still obtained. > 44. Implications and future research, (Our work provides insight into descriptive models of choice, normative theories of choice, and prescriptive guidelines for helping people make better decisions. 4.1, Descriptive models Figure 1 suggests that decisions modeled as though they are in Cell | (“Precise-precise”) are the exception rather than the rule. Morcover, our results suggest that even when individuals have precise information on probabilities and outcomes, their behavior does not necessarily conform to the dictates of rational models such as cost-benefit analysis. In this study, we assumed thet people were using arguments to make their decisions ‘and, infact, asked them rostate and rate arguments used. This differs from other studies. In the work of Simonson (1989) and Shafiret al. (1889), for example, subjects are not ‘asked to express arguments. Instead, the arguments are inferred from choices made Demeen alternatives with specific configurations of arguments. ‘Our results suggest that one-sided arguments or justificatory processes may be more likely to occur in situations of ignorance 2s opposed to rsk. Under risk, explicit tredeofis, are salient. Under ignorance, decision makers are free to recruit arguments to support their intuitions and to ignore conflicting arguments (Our work also implies that people can approach choices in two ways—namely, with predetermined meta-rules or by being sensitive tothe particular features of choice alter- natives. In most decision research, investigators typically postulate that subjects use one kind of strategy for particular choices. The distinction between meta- and non-meta- strategies reported here is similar to a distinction made by Fiske and Pavelchek (1986) between “category-based” and “piccemeal-based” responses in the domain of affect. ‘Thats, when making affective responses to stimuli, people sometimes react to the whole ‘pattem ofthe stimulus (i2., by recognizing categories) or by processing its component parts. Asin our work, it will be important to determine when people use one kind of rule (orthe other. 42. Normative choice theory (Our results provide further evidence of the importance of ambiguity in choice but rclate to the more general topic of “decision making under ignorance.” Relatively little has ‘been written in tis area. Arrow and Hurwic2 (1972) and Cohen and Jaffray (1980) have suggested that under complete ignorance, people should act as though they are com- pletely sure or unsure about events affecting outcomes. In our task, this would meanROBIN, HOGARTHIHOWARD KUNREUTHER either assuming that 2 breakdown would or would not occur, Had subjects in aur exper- iments behaved in this manner, we would have expected to have seen many more ex- seme probability of purchase intentions in the ignorance conditions. 43. Prescriptive plications (Our results suggest thet it would be helpful to provide consumers with information on the probability of breakdowns and costs of repairs. When consumers have knowledge of these values (admittedly “provided” by third parties), this does change their decisions. One idea is to provide consumers with a simple form or card that prompts them to estimate the relevant quantities prior co making 2 decision. Alternatively, these kinds of questions could be generated 2 computer program that consumers could consult prior 10 making important household purcheses. Consumer decision making could also be improved if arguments focused on relevant tradeoffs, For example, an argument under ignorance that takes tradeoffs expiicitly into account is the realization that firms will typically not offer warranties at prices below expected value. A relevant argument for consumers would therefore focus on whether they are sufficiently risk averse (financially and psychologically) to let the firm have their profit for the kind of item under consideration. For some, this may translate into how much they are prepared 10 pay over expected value to justify “peace of mind.” For others, a warranty may be treated as a form of financial insurance: paying @ small pre~ rium to protect oneself against « potentially large loss. 44. Funee research (Our paradigm and resulis raise the issue of whether the standard gamble (as represented by Cell | of igure L) can be enriched in future research, since it does not capture much of the variety of choices faced by people in the real world. A useful analogy is to think ofthe laboratory game's role in choice theory 2s being akin to the use of nonsense syllables in the psychological study of memory (Goldstein and Weber, forthcoming), Nonsense shilables have been useful for studying limited aspects of how memory ‘works, ¢.g. variations in short-term memory span and so on. However, because human ‘memory is a phenomenon that is co dependent on context, te nonsense gyllable para digm has proven inadequate. Similarly, the effects of context have been demonstrated as critical to the study of choice over the last two decades (Einhorn and Hogarth, 1981 Payne et al, 1992). ‘Will the study of choice finally show that the standard laboratory gamble was an oversimplification of individual decision making in much the same way that nonsense syllables proved inadequate for studying memory? The findings reported in this arti- cle suggest the need to expand the treatment of decision making under risk, ambigu- ity, and ignorance. Thinking of choice as an argument with oneself may help to enrich the standard paradigm,DECISION MAKING UNDER IGNORANCE, Ey Acknowledgments ‘This work was funded by a grant from the Russell Sage Foundation. We wish to thank Craig McKenzie, Barry Blecherman, Cynthia Sherman, Klaus Wertenbroch, and Mike Ziolkowski for most able assistance, and William Goldstein, Steve Kimbrough, Craig. McKenzie, and two anonymous referees for many useful comments Notes (Cell names are pen fs by row and then by column. Le. the outcome dimension folowed ty te protatly dimension. Foreanple, Katneman and Tersky (1979) useda wide ange ofsuch standard sarnies to develop and {est the concepts of prospect hear. “The ambiguous os estes were cper ty minima and masimum low estimates 4. Thefoaritemnwere chosen efter dacusions with students. They were familiar w almost exenone, since ros ofthe students anler ther fares owned several ofthe ferme, 5. A perevetage scale was ued to ved a sense of comment ta definite ansver that might have besa ‘engencered ty Yes ot No response, We de ths, pecans. fling a pil stay. we wihed to avoid hasing subjects fee that hey hed oust thee ansner (i=. 10 buyer noe bes) when we subseguey skec trem forthe arguments nich they hid seed in determining the response In theory. one couldeombne alldatastoone experimental rays. We feel. however tha! theresa re ‘more interpretable wnen each stimulus seated asa separate experiment. We note. parenthetical that {he anaysk usec here leas to mere coserathe estimates of experimen eMecs ‘When debrietng Experiment 2 we speciicaly asked 13 subjects wheter they remembered their r= sponses from the previous week. Oris one of hese subjecisclamed tobe able o ferme his responses, However. he was aly able recall acuraey ne of his four responses conceing he [Red parchasng the warany 1 Thore ie lageliteratar showing that repression techniques capture mochvarieneofjudgments mace by Jncduae sero series f coos (04, Sloe an Lichtenstein, 1971), We are reluctant o bebre however tat thi difrenoe i ni of anal can asco forthe poor regretion sels eporied here In adaion to the regresin ress reported in table 3 we sk iresigated various norlinese models to ‘acount forthe fact thatyconstranedbotseen Dad |. However, overal these model didn prove beter soca dat. ‘9, Weare rateflto Kaus Werendroch fr developing the argumenteoting Scheme. 2 copy of which canbe pire fm he authors 401 The nutios behing using correlation a measute of sintary ‘expressed inte fllming question: It you knew te values within each catepor {cr one dieu could ou predic ancter” ‘Acs: experiments sand ignorance aso hav low correlations namely. nd ~ 0. ‘Acros al products the average percentage of subjecis that ga responses of 50 wee ia Experine ‘anc 7.3in Emperiment 2. Siar. the percentage of probblais ~ SO ete 27 and 3 for he erorence ‘conctins of Experimens 1 and, respecivel, Te oorresponcing figures fort sk conditions were 5D an 13, Of the two ps of arguments that were more frequen ender conitons of ignorance Ila: “Warranty peice and produc peice andIila:"Reliabiy”—there was Ble evidence that he typect argumen! ved ‘harvest to porchaing Geisons. One exception ocurred in Experiment | where “Warranty pice and rect price” was ted ina aio of I by “Exye versa "no Dune 14. The specie arguments were generated by usflewing an ana of eat froma pb! experiment 15 We ako note tat our stcy demansiateg the exktence of smbigutyignorants effets for values of promibites that were nt eal t0.5 jonaied by giving wobec range ef posse values bounded30 ROBIN M HOGARTHHOWARD KUNREUTHER References ‘Asroy, KJ. and L Hurwic. (2972). “An Opsinality Crtesion or Decision Making Under Igarance In CF. Canter and JL. Ford (eds), Uncenaeuy and Execivins le Ezoncands, Oxtrd: Bast Blackwell & Mott Li (Camere, C. Fy and M, Weber, (1852. “Recert Developments in Medelng refereres: Ureetany and "Jounal of Ris aed Creer 5, 238-30. tnd JY Jt (1990). “Rational Behavier under Compe Ignorance,” Economica $845) sr ‘Coombs C.H.. RM: Dawes and A. Teri (1970). Methematiel Pho x Elmersay inroduction Englewood Cif, NJ: Prentice Hall, (Corey §P and JF. Yatr. 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