Communicating uncertainty: Framing effects on responses to vague probabilities

Most real-world risky decisions are based on imprecise probabilities. Although people generally demonstrate vagueness aversion, behaving as if vaguely specified probabilities are worse than comparable precisely specified probabilities, vagueness seeking also occurs. Previous explanations of vagueness preferences have been based on individual differences and regressive beliefs about extreme probabilities, and little research has examined the effect of changes in the way vagueness is communicated to the decision maker. The present study demonstrates that gain/loss framing, moderated by the operationalization of vagueness, influences how people respond to vagueness about a probability estimate. Subjects read scenarios describing consumer purchases, organizational marketing decisions, and medical treatments, and expressed preference between options having either precisely or vaguely described probabilities. Vagueness was operationalized either as a range of possible values or as verbal qualification of a single point estimate. Negative framing was associated with greater preference for vague prospects, unless vagueness was described by a numerical range with the higher value presented first, indicating a substantial primacy order effect. A second experiment demonstrates that negative framing led people to make more favorable inferences about the likelihoods of vague probabilities. (C) 1997 Academic Press.