Decision making under internal uncertainty: the case of multiple-choice tests with different scoring rules

Area of Science:

• Cognitive Psychology
• Behavioral Economics
• Decision Science

Background:

• Decision-making under internal uncertainty (partial knowledge) is complex.
• Framing effects significantly influence choices, particularly in uncertain environments.
• Prospect Theory (PT) provides a framework for understanding risk preferences.

Purpose of the Study:

• To investigate framing effects on decision-making with internal uncertainty.
• To examine how different scoring rules in multiple-choice (MC) tests impact examinee behavior.
• To test the applicability of Prospect Theory to choices involving partial knowledge.

Main Methods:

• Two experiments were conducted using a general-knowledge MC test.
• Experiment 1: Compared Positive (gains only) and Negative (losses only) scoring rules.
• Experiment 2: Compared Inclusion (mark all possible correct) and Exclusion (exclude incorrect) scoring rules.

Main Results:

• Under Negative scoring, participants showed a greater tendency to answer items compared to Positive scoring, aligning with PT.
• Under the Inclusion rule, participants took more risks than under the Exclusion rule, also supporting PT predictions.
• Framing effects were observed, demonstrating their influence on behavior under internal uncertainty.

Conclusions:

• The framing of choices significantly impacts decision-making under internal uncertainty.
• Prospect Theory accurately describes choice behavior and framing effects in situations with partial knowledge.
• Scoring rules in assessments can be designed to elicit specific risk-taking behaviors.