DISPLAYING UNCERTAIN INFORMATION ABOUT PROBABILITY: EXPERIMENTAL EVIDENCE

Different from previous experiments that used three representations of uncertain information for probabilities: best estimate, interval and sets of probabilities, we use visual display to represent different levels of uncertainty through varying amount of probabilistic information provided to subjects. Results confirm that the individuals’ willingness to pay is higher when a larger amount of information is available. Further, individuals are found uncertainty averse for high probability of gain and uncertainty seekers for low probability of gain. Similarities in results across different representations of uncertainty indicate that the representation tested here is a viable method for communicating uncertainty to decision makers.