The effects of behavioral and outcome feedback on prudent decision-making under conditions of present and future uncertainty

Judgment and Decision Making, Vol. 1, No. 1, July 2006, pp. 76–85
The effects of behavioral and outcome feedback on prudent
decision-making under conditions of present and future uncertainty
Jay C. Brown?
Department of Psychology
Texas Wesleyan University
Abstract
One of the largest reasons decision-makers make bad decisions (act imprudently) is that the world is full of uncer-
tainty, we feel uncertain about the consequences of our actions. Participants played a repeated game in which decisions
were made under various types of uncertainty (either no uncertainty, uncertainty about the present consequences of
behaviors, uncertainty about the future consequences of behavior, or both types of uncertainty). The game required
prudent decision making for success. While playing the game one of three types of feedback was placed between tri-
als, either no feedback, behavioral feedback, or behavioral plus outcome feedback. Prudent decision-making decreased
when both types of uncertainty were added. Further, the addition of feedback increased prudent decision-making when
future uncertainty was present. The increase in prudent decisions appears to be from feedback’s ability to allow us to cre-
ate probabilities associated with behaviors and their consequences, implying that anything that reduces the uncertainty
people feel in a world full of uncertainty will increase their ability to make prudent decisions.
Keywords: uncertainty, decision-making, feedback, prudence, human experimentation
1 Introduction
larly by the individual. Our social interactions can be
thought of as a competition between us and them; our
Nearly every imprudent behavior (unhealthy, risky or
self-interactions can be thought of as a competition be-
dangerous), such as drug use, unprotected sex, smoking
tween our present-self and our future-self (see also Rach-
or gambling can be thought of as the result of an inabil-
lin, Brown, & Baker, 2001).
ity to properly weigh future consequences against current
In a single-player iterated decision making situation, a
pleasures (Rachlin, 1997). Usually, these types of behav-
player’s present self (trial N) is in competition with the
iors lead to pleasure today at the expense of pain tomor-
player’s future self (trial N + 1). One type of game in
row. As long as these imprudent behaviors are chosen
which this competition with the self is studied is pris-
only occasionally, they probably will not interfere with
oner’s dilemma games in which a human player plays
our ability to function as productive members of society.
against a dummy opponent that is programmed to play
However, at some point these poor choices can come to
the game using a tit-for-tat strategy (the dummy player’s
dominate a person’s life and lead to negative long-term
choices mirror the human player’s choices). In these sin-
consequences. Prudent decision-making can be thought
gle player prisoner’s dilemma games a con?ict exists be-
of as decision-making driven by long-term consequences
tween maximization of local and global reinforcement
rather than immediate outcomes.
(Yi & Rachlin, 2004). Choices which maximally bene-
The consequences of our decisions can fall on others
?t the present self often harm the future self (imprudent
or they can fall to ourselves. In decisions involving so-
options) and choices which maximally bene?t the future
cial interactions, the consequences of my good or bad
self are usually undesirable to the present self (prudent
behavior are felt by others. If I am rude, others will
options). Even though both “players” are the same per-
suffer. If I am considerate, others will bene?t. In de-
son, it may be dif?cult for individuals to make effective
cisions involving self-interactions, the consequences of
choices here because both the present and future conse-
my good or bad behavior are felt by myself. If I, in the
quences of decisions are rarely set in stone. The college
present, choose to save or spend money today, my fu-
student which forgoes the party in favor of studying will
ture self is the bene?ciary or victim of a larger or smaller
usually receive less utility during the night of studying
savings account. Brown and Rachlin (1999) showed that
than they could have received from the party, but usu-
these two decision-making situations are treated simi-
ally will maximize long-term utility in the form of bet-
?Dr. Jay Brown, Department of Psychology, Texas Wesleyan Uni-
ter grades and etc. If a player chooses sel?shly (impru-
versity, Fort Worth, TX 76105, Jbrown06@txwes.edu.
dently) on trial N, he or she will usually bene?t on trial
76

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
77
N, the consequences of the imprudent behavior from trial
culate some mental probabilities about the consequences
N (if indeed there are any) are not felt until trial N + 1.
of possible actions. In order to properly assess the future
Similarly, if a player chooses wisely (prudently) on trial
consequences of behavior, decision-makers should ide-
N, he or she will usually suffer on trial N, any possible
ally look to the past. That is, decision makers should
bene?ts for the prudent behavior on trial N will not be
ultimately ask themselves, in the past, when in a sim-
felt until trial N + 1. (Brown & Rachlin, 1999; Green,
ilar situation, how many times did I choose option A
Price & Hamburger, 1995). It may be argued however,
and how many times did I choose option B and further,
that a game such as this is not a game of self-control but
what were the outcomes when I did choose A and when I
rather an issue of cognitive impulsiveness, an overwhelm-
did choose B. Obviously, decision-makers do not do this
ing of the individual by the immediate consequences such
for a variety of reasons including the amount of (cog-
that long-term consequences are never seen or considered
nitive) effort involved and the fact that their memories
(Herrnstein, Loewenstein, Prelec, & Vaughn, 1993).
are less than perfect. In cases of uncertainty, a decision-
The uncertainty of the situation helps to determine our
maker may operate using some average values which de-
behavior in social-interactions: We will be “nice” to oth-
scribe the range of possible probabilities involved. Given
ers in a social-interaction only if we feel that others will
this possibility, however, if people’s memories could be
be “nice” back (Baker & Rachlin, 2001; Chaudhuri, So-
stimulated (through feedback about past actions and con-
pher, & Strand, 2002; Rachlin, Brown, & Baker, 2001).
sequences), then their ability to estimate probabilities
That is, if we feel there is an uncertainty about whether
for future choices should improve and thus their pru-
the other person in a social-interaction will reciprocate
dent decision-making should increase (Harvey & Fischer,
our kindness, we will not be kind to begin with. The
2005; Schweitzer & Hsee, 2002).
same rule of uncertainty also controls our self-behaviors
I hypothesize that the addition of both Present-
(Brown & Lovett, 2001). It is as if the presence of uncer-
Uncertainty and Future- Uncertainty will decrease partic-
tainty provides justi?cation (or possibly an excuse) for
ipants’ ability to exhibit prudent decision-making (make
imprudent behavior (Schweitzer & Hsee, 2002).
correct choices). I also hypothesize that feedback about
In most self-interactions we must choose between
our past behaviors and the consequences of these behav-
long-term and prudent decisions (larger rewards in the
iors will leave us better able to understand the uncer-
long-run, but smaller rewards at the moment) and short-
tainty inherent in the decision-making process and thus
term and imprudent decisions (larger rewards at the
increase our ability to exhibit prudent decisions (make
present moment, but smaller rewards in the long-run);
the right choices). In this experiment, people were asked
however, there is bound to be uncertainty on the part
to make 200 two-option choices in a computer game de-
of the decision maker.
The uncertainty in this type
signed to measure prudent decision-making. The present
of decision-making generally ?ts the following pattern:
and future consequences of decisions were made either
short-term outcomes are often somewhat predictable
certain or uncertain by modifying probabilities of out-
(though not always), but long-term outcomes are usu-
comes of different aspects of the game. Additionally, fol-
ally less predictable. For a smoker contemplating quit-
lowing each choice, people were either given No Feed-
ting, there is a general level of understanding of the con-
back, feedback about their past behaviors (Behavioral
sequences of not smoking today (i.e., withdrawal symp-
Feedback), or feedback about their past behaviors and
toms, but the severity is unknown). However, the conse-
the outcomes of those behaviors (Behavioral/Outcome
quences of quitting smoking in the long-run are very un-
Feedback). These manipulations created a 2 X 2 X 3
certain (maybe they will experience better health, maybe
(Present-Uncertainty X Future-Uncertainty X Feedback)
not). In an experiment by Bendor, Kramer and Stout
design. I hypothesize that both Present-Uncertainty and
(1991), computers were programmed to play against each
Future-Uncertainty built into the game will decrease peo-
other in a prisoner’s dilemma game. Each computer was
ple’s ability to exhibit prudent decision-making com-
programmed with various strategies for play. Levels of
pared to a control condition with no uncertainty (per-
cooperation were quite high when playing against a tit-
fect predictability) since increasing uncertainty seems to
for-tat opponent and when random uncertainty (noise)
lead to decreased prudent decision-making in real life
was added to the tit-for-tat strategy, cooperation by the
situations1. I also hypothesize an interaction between
opponent decreased dramatically. In real life, this type
Present-Uncertainty and Future-Uncertainty such that the
of uncertainty of consequences may also be responsible
addition of both Present/Future-Uncertainty will decrease
for decreased levels of prudent decision-making. If this
uncertainty (which is inherent in the real world) could
1 Though uncertainty is being treated as an isolated issue in this
be reduced then the number of prudent decisions people
paper, it must be noted that uncertainty in this type of decision mak-
make should increase.
ing process will be a moderator of the predictions that would be made
solely using time discounting functions (Frederick, Loewenstein, &
When faced with an uncertain world, people must cal-
O’Donoghue, 2002).

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
78
Figure 1: A single player choice game with short-term and long-term consequences. In this game, the top doors are
red and the bottom doors are green.
prudent decision-making further than either type of un-
button mouse. The computer game was written using Mi-
certainty alone. Further, I hypothesize that as the amount
crosoft Visual Basic.
of feedback increases (No Feedback, Behavioral Feed-
Prior to experimentation, informed consent was given
back, Behavioral/Outcome Feedback) people’s ability to
and all responses were kept fully con?dential. Partic-
exhibit prudent decisions will also rise due to feedback’s
ipants were ?rst asked a series of demographic ques-
ability to remind people about past behaviors and/or con-
tions and a series of questions designed to assess behav-
sequences, thus helping them to better understand proba-
ioral self-control (ability to make prudent decisions in the
bility.
real world) from external sources (including things such
as smoking and alcohol consumption behavior). It was
through the use of these types of questions that the pro-
2 Method
cedure to be described was validated in earlier research.
At the conclusion of the game participants were asked to
2.1 Participants
estimate the probabilities of various aspects of the game
(keys and points to be described).
Three-hundred undergraduate volunteers (166 females
General Rules of the Game. During the main portion
and 134 males) from an undergraduate participant pool
of the experiment, participants played a computer game
at Missouri State University participated in this experi-
which was designed to simulate the decisions containing
ment. All participants were treated in accordance with
short-term and long-term consequences we make every
the ethical standards of the American Psychological As-
day and was similar to a single player prisoner’s dilemma
sociation.
game played against a dummy player using a tit-for-tat
strategy (Bendor, Kramer & Stout, 1991). Participants
were asked to make a series of decisions involving keys
2.2 Apparatus and procedure
and doors on the game board shown in Figure 1. The
rules of the game shown are quite simple.
Participants made decisions between the options in a
game containing short-term and long term consequences
by pressing buttons on the screens using a standard two-
1. Participants are given a red key to begin the game.

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
79
2. Red keys open red doors and green keys open green
the probability generating mechanism such that the ob-
doors (the top two doors are red, the bottom two
tained probabilities re?ected programmed probabilities
doors are green).
both locally (extreme strings were eliminated) and glob-
ally (obtained probabilities were kept within 5% of the
3. When a door is opened, the key which was used is
programmed probabilities).
given up.
As described earlier, upon choosing the top left door
4. When a door is opened, the participant may receive
in the control version of the game participants always re-
the points shown and he/she will receive a new key
ceived 4 points (5 points after choosing top right, 1 point
(red or green).
after bottom left, 2 points bottom right). In the Present-
Uncertain version of the game, 5 points were showing in
5. The game will be reset and more choices will be
each of the left boxes and 7 points were showing in each
made using the new key received (the game will be
of the right boxes. Upon choosing the top left door in the
played many times).
Present-Uncertain version, there was an 80% chance that
the player would receive the 5 points and a 20% chance
6. The goal is to make as many points as possible.
that a message would appear which read, “Sorry, you do
If the participant possesses the red key, he/she can
not receive any points this time”. This led to an average
choose between 4 points and 5 points. If the partici-
payout of 4 points (5 *.80) for each top left choice. Upon
pant possesses a green key, he/she can choose between
choosing the top right door in the Present-Uncertain ver-
1 point and 2 points. Using this basic paradigm, four dif-
sion, there was a 71.43% chance that the player would
ferent versions were created (Control, Present-Uncertain,
receive the 7 points and a 28.57% chance that the sorry
Future-Uncertain, and Present/Future-Uncertain). Each
message would appear (average 5 points). Upon choos-
participant saw only one of these versions.
ing the bottom left door there was a 20% chance that
Control Version. In the control version of this game,
the player would receive the 5 points (average 1 point).
behavior was deterministic.
That is, choice for the
Upon choosing the bottom right door there was a 28.57%
smaller option (1 or 4) always yielded a red key which
chance that the player would receive the 7 points (average
could be used on the next trial, and choice for the larger
2 points). The average payouts were exactly the same as
option (2 or 5) always yielded a green key. These new
the control version (that is, the expected value of each of
keys appeared only after participants had made a choice
the choices was held constant between the Control and
using the old key. On every individual trial, it was bet-
Uncertain-Present version).
ter to choose the larger points (better short-term conse-
As described already, the participant did not know
quences), but it was MUCH better in the long-run to
which key would be received until after a choice had
have red keys which could only be obtained by choos-
been made. When opening a door on the left side, partic-
ing the smaller points (better long-term consequences).
ipants playing the Future-Uncertain version received the
These two goals are not compatible. The solution to this
red key 75% of the time (and therefore, a green key 25%
game is quite simple: Always choose the red door with
of the time). The probability of receiving a green key af-
the smaller number of points, always receive 4 points
ter choosing a door on the right side was also 75% (with
(which is pretty good!) and always receive a red key
a 25% chance of receiving a red key). This manipulation
(which is very good). Successful participants must by-
of keys led to expected values in the Control and Future-
pass the temptation of short-term consequences during
Uncertain groups which were not constant.
every single trial. Prudent decision-making is measured
Adding Feedback. Following each trial, a text box ap-
in this game as the percent of trials (there are 200 total) in
peared on the screen. This text box contained differ-
which participants choose the left-side doors (both have
ent things for each of the feedback conditions. For the
the smaller present points, but yield the red key).
No Feedback versions of the game, the text box sim-
Present-Uncertain and Future-Uncertain Versions. In
ply contained the words, “Click OK to continue” and 1
the control version of the game, from 1 to 5 points
s later, a button appeared which would present the next
was received after every choice (present or short-term
trial. For the Behavioral Feedback version, the text box
consequences) and red keys were given for every left
contained the following “You picked the Top Left/Top
side choice and green keys were given for every right
Right/Bottom Left/Bottom Right door X times”. This
side choice (future or long-term consequences). In or-
line only contained the door just chosen and X was re-
der to make a Present-Uncertain version, the points were
placed with the number of times the door had been cho-
made uncertain (not always received). In order to make
sen up to that point in the experiment. This text was again
a Future-Uncertain version, the keys were made uncer-
followed 1 s later by a button which, when clicked, pre-
tain (not always the same color for the same choice).
sented the next trial. For the Behavioral/Outcome Feed-
The computer program had correction factors built into
back version, the text box contained the same words as

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
80
the Behavioral Feedback, but also contained the follow-
ing “. . . .and received the red key X times and the green
Table 1: Results from 2 X 2 X 3 (Present-Uncertainty X
key Y times”. Again, this was followed 1 s later by a but-
Future-Uncertainty X Feedback) Omnibus ANOVA
ton which continued the game. Participants received only
one type of feedback throughout the game.
Statistic
Source
df
MS
F
p
Uncertain Present (UP) 1
5.271
554.95
.000
3 Results and discussion
Uncertain Future (UF)
1
2.614
275.25
.000
Feedback (F)
2
0.203
21.38
.000
UP X UF
1
0.698
73.53
.000
3.1 Control group and basic comparisons
UP X F
2
0.038
3.97
.020
UF X F
2
0.054
5.65
.004
Control Group.
Overall, the control group (No-
UP X UF X F
2
0.090
9.46
.000
Uncertainty and No-Feedback) exhibited prudent
Error
288
0.009
decision-making (control by long-term rather than
immediate consequences) by choosing doors on the left
side of the game on nearly every trial (M = 94.7%).
This prudent decision-making increased as the game
3.2 Experimental groups
progressed (M = 85.6% during trials 1–50; M = 96.4%
during trials 51-100; M = 98% during trials 101–150;
A 2 X 2 X 3 (Present-Uncertainty X Future-Uncertainty
and M = 98.8trials 151–200). As can be seen, with no
X Feedback) between-subjects analysis of variance on
uncertainty and no feedback, the game is quite easy for
the amount of prudent decisions exhibited by the par-
participants to “solve”, that is, participants are driven
ticipants in the game was performed.
As can be
by long-term consequences quite readily in the face of a
seen in Table 1, every effect was signi?cant, most no-
perfectly predictable situation.2
tably the interaction of Present-Uncertainty X Future-
Uncertainty, F (1, 288) = 73.53, p < .001. Be-
Basic Comparisons with No Feedback. A one-way be-
cause of this interaction, separate analyses were per-
tween subjects ANOVA run on participants in the four
formed for each combination of present and future un-
different conditions, testing only those participants who
certainty (No-Uncertainty, Present-Uncertainty, Future-
received No Feedback, revealed that these groups sig-
Uncertainty, and Present/Future-Uncertainty). A sum-
ni?cantly differed, F (3, 96) = 165.67, p < .001,
mary of the ?ndings of these analyses can be seen in Fig-
M S = 1.49. A priori contrasts revealed that the No-
ure 2 which displays prudent decision-making during the
Uncertainty group (94.7%) exhibited signi?cantly higher
?nal Fifty-trial block of the experiment.
levels of prudent decision-making than the Present-
No-Uncertainty Groups. As can be seen in Figure 3,
Uncertainty group (48.2%), t(96) = 14.98, p < .001,
at least initially, the addition of Behavioral Feedback and
or the Future-Uncertainty group (55.1%), t(96) = 17.55,
Behavioral/Outcome Feedback actually hurt these partic-
p < .001. Additionally, the Present/Future-Uncertainty
ipants’ ability to exhibit prudent decisions (perhaps the
group (40.5%) exhibited signi?cantly lower levels of pru-
task was so easy that the feedback confused them). How-
dent decision-making than the average of the Present-
ever, these initial differences seen during the ?rst and sec-
Uncertainty and Future-Uncertainty groups, t(96) =
ond ?fty trials virtually disappeared as the experiment
?4.81, p < .001. These ?ndings support the basic pre-
progressed. A 3 X 4 (Feedback X Fifty-Trial Block)
dictions that the addition of present or future uncertainty
mixed-factor analysis of variance was performed on the
will decrease prudent decision-making and that the ad-
proportion of the responses which were made on the left
dition of both types of uncertainty will decrease prudent
side of the game board (prudent decision) for the groups
decision making even further.
with No-Uncertainty (see Table 2).
One-way analyses of variance were performed on the
2 The correlation between participants’ reported ACT (American
mistakes that participants made in estimating the key and
College Test) composite score and overall performance in the game was
point outcomes. Mistakes in estimation for points were
not signi?cant, r(25) = .304. Also, the correlation between perfor-
mance on the game and scores from a survey designed to assess im-
measured by the absolute difference between the actual
pulsiveness was not signi?cant, r(25) = ?.291. These two ?ndings,
percent of times the points were received from a door and
though not signi?cant, suggest that, though the game is one which relies
the estimated percent of time points were received from
on past academic success, it clearly also is a measure of impulsiveness.
a door was calculated for each of the four doors sepa-
However, as the correlation between the measure of impulsiveness and
ACT composite score indicates impulsiveness and past academic suc-
rately. These differences were simply averaged together
cess would seem to go hand in hand (r(25) = ?.424, p < .05).
to create a measure of error in predicting points. A mea-

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
81
Table 2: Results from 3 X 4 (feedback x ?fty-trial block) ANOVA’s.
Statistic
Source
df
MS
F
p
No Uncertainty
Feedback
2
0.038
3.94
.023
Fifty-Trial Block
3
0.606
138.90
.000
Feedback X Fifty-Trial Block
6
0.017
4.01
.001
Error (Fifty)
216
0.004
Error (Feedback)
72
0.010
Present-Uncertainty
Feedback
2
0.138
2.75
.070
Fifty-Trial Block
3
0.234
17.23
.000
Feedback X Fifty-Trial Block
6
0.014
1.00
.425
Error (Fifty)
216
0.014
Error (Feedback)
72
0.050
Future-Uncertainty
Feedback
2
0.657
10.71
.000
Fifty-Trial Block
3
0.824
38.34
.000
Feedback X Fifty-Trial Block
6
0.028
1.32
.251
Error (Fifty)
216
0.022
Error (Feedback)
72
0.061
Present/Future-Uncertainty
Feedback
2
0.240
12.68
.000
Fifty-Trial Block
3
0.016
1.72
.164
Feedback X Fifty-Trial Block
6
0.026
2.72
.014
Error (Fifty)
216
0.009
Error (Feedback)
72
0.019

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
82
sure of error in predicting keys was calculated in a similar
manner. There was no difference in errors in estimating
points between the different feedback groups. Similarly,
100
No feedback
there was no difference in errors estimating keys between
Behavioral
the different feedback groups. This lack of ?ndings is
Behavioral/Outcome
not particularly surprising or enlightening since the ma-
80
jority of participants in the No-Uncertainty groups were
perfectly accurate in estimating both keys and doors (they
were all at unity for these groups).
60
Present-Uncertainty Groups. As can be seen in Fig-
ure 4, there is a general rise in prudent decision-making
throughout the experiment for all groups. Behavioral
40
Feedback is generally higher than No Feedback which
is generally higher than Behavioral/Outcome Feedback.
Percent prudent decisions
A 3 X 4 (Feedback X Fifty-Trial Block) mixed-factor
20
analysis of variance was performed on the proportion
of the responses which were made on the left side of
98.3
97.7
97.2
57.6
63.2
55.7
61.6
69.0
80.4
40.0
47.5
54.8
the game board (prudent decisions) for the groups with
0
Present-Uncertainty (see Table 2). The overall number
C
UP
UF
UPF
of prudent decisions made by people receiving No Feed-
back (48.2%), Behavioral Feedback (55.7%), and Be-
Figure 2: Prudent decision-making exhibited by the Con-
havioral/Outcome Feedback (51.8%) did not signi?cantly
trol (C), Uncertain-Present (UP), Uncertain-Future (UF),
differ. The number of prudent decisions across the Fifty-
and Uncertain-Present/Future (UPF) groups during the ?-
Trial Blocks of the experiment (45.3%, 50.6%, 52.8%,
nal Fifty-trial block of the experiment. Numbers shown
58.8%) signi?cantly differed. A trend analysis revealed a
are the means.
signi?cant linear trend, F (1, 72) = 32.07, p < .001.
Though it appears as though neither type of feedback
is enough to increase prudent decisions when the short-
term consequences of our actions are uncertain (Present-
Uncertain), considerable experience (by the ?nal Fifty-
Trial Block) can increase prudent decision-making.
100
One-way analyses of variance were performed on the
mistakes that participants made in estimating the key
80
and point outcomes. There was no difference in er-
rors in estimating points or keys between the different
feedback groups. This ?nding is somewhat expected
60
given the results from the prudent decision making de-
scribed above (namely that feedback did not seem to ef-
No feedback
fect prudent decision-making for the Present-Uncertainty
40
Behavioral
groups). The addition of feedback did not seem to ben-
Behavioral/Outcome
e?t the participants’ understanding of the contingencies
Percent prudent decisions
present.
20
Future-Uncertainty Groups. As shown in Figure 5,
the number of prudent decisions rose for all groups as
the experiment progressed. Also, it can be seen that,
0
other than the ?rst block, the order of the feedback
One
Two
Three
Four
groups from least to most prudent decisions is No Feed-
Fifty?trial block
back, Behavioral Feedback, Behavioral/Outcome Feed-
back. A 3 X 4 (Feedback X Fifty-Trial Block) mixed-
Figure 3: Prudent decision-making exhibited by the No-
factor analysis of variance was performed on the propor-
Uncertainty groups across Fifty-Trial Blocks of the ex-
tion of the responses which were made on the left side of
periment.
the game board (prudent decisions) for the groups with
Future-Uncertainty (see Table 2). The overall number
of prudent decisions made by people receiving No Feed-

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
83
back (55.1%), Behavioral Feedback (57.1%), and Behav-
ioral/Outcome Feedback (70.0%) signi?cantly differed.
A priori contrasts revealed that the addition of Behav-
100
ioral/Outcome Feedback signi?cantly increased prudent
decision-making over No Feedback or Behavioral Feed-
No feedback
back, but Behavioral Feedback did not signi?cantly in-
80
Behavioral
Behavioral/Outcome
crease prudent decision-making over No Feedback. The
number of prudent decisions across the Fifty-Trial blocks
of the experiment (46.3%, 60.1%, 66.1%, 70.3%) sig-
60
ni?cantly differed. A trend analysis revealed a signi?-
cant linear trend, F (1, 72) = 61.71, p < .001. It ap-
40
pears that when the long-term consequences of our ac-
tions are uncertain (Future-Uncertain) two conclusions
can be drawn. First, we can de?nitely bene?t (prudent de-
Percent prudent decisions
20
cisions increase) from experience and second, feedback
must include both past behaviors and outcomes in order
to be effective.
0
One-way analyses of variance were performed on the
One
Two
Three
Four
mistakes that participants made in estimating the key
Fifty?trial block
and point outcomes. As expected, there was no signi?-
cant difference in point errors based on type of feedback.
However, the No Feedback (15.1%) and Behavioral Feed-
Figure 4: Prudent decision-making exhibited by the
back (16.7%) groups made signi?cantly more mistakes in
Present-Uncertainty groups across Fifty-Trial Blocks of
estimating the keys than the Behavioral/Outcome Feed-
the experiment.
back group (9.6%), F (2, 72) = 4.78, p < .05. The ad-
dition of Behavioral/Outcome Feedback seemed to bene-
?t prudent decision making (described in previous para-
graph) by increasing participants’ understanding of the
contingencies present.
Present/Future-Uncertainty Groups. As can be seen in
100
Figure 6, there is virtually no change in prudent decisions
across the experiment for either the No Feedback or Be-
havioral Feedback groups, but there is a rise for the Be-
80
havioral/Outcome Feedback group. A 3 X 4 (Feedback X
Fifty-Trial Block) mixed-factor analysis of variance was
performed on the proportion of the responses which were
60
made on the left side of the game board (prudent de-
cisions) for the groups with Present/Future-Uncertainty
No feedback
(see Table 2). A signi?cant Feedback X Fifty-Trial Block
40
Behavioral
Behavioral/Outcome
interaction was revealed. When the world is very dif?cult
to predict (Present/Future-Uncertain) prudent decision-
Percent prudent decisions
making does not seem to rise with experience as had been
20
true in every other group (the No Feedback group’s pru-
dent decisions were ?at across the experiment). In or-
0
der to bene?t from experience in this case, the experi-
ence must include feedback about past behaviors and out-
One
Two
Three
Four
comes (explicit reminders of what’s been happening).
Fifty?trial block
One-way analyses of variance were performed on the
mistakes that participants made in estimating the key and
Figure 5: Prudent decision-making exhibited by the
point outcomes. The No Feedback (22.3%) and Behav-
Future-Uncertainty groups across Fifty-Trial Blocks of
ioral Feedback (20.3%) groups both made signi?cantly
the experiment.
more mistakes in estimating the points than the Behav-
ioral/Outcome Feedback group (15.9%), F (2, 72) =
3.23, p < .05. There was no signi?cant difference in key

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
84
the addition of feedback led to increased levels of pru-
100
dent decision-making. Contrary to predictions however,
the feedback relationship was quite complicated. When
No feedback
there was No-Uncertainty, feedback led to decreased lev-
80
Behavioral
els of prudent decisions and feedback had its strongest
Behavioral/Outcome
effect when the future was uncertain. When there was
No-Uncertainty, perhaps the addition of feedback simply
60
leads to confusion, an otherwise simple problem appears
complicated. When the future is uncertain, then it seems
as though Behavioral/Outcome Feedback is required be-
40
fore an improvement in prudent decision-making is seen.
This outcome seems sensible when one considers the role
Percent prudent decisions
feedback seems to play in allowing us to accurately keep
20
track of probabilities, thus decrease uncertainty. In order
to accurately assess probability, one must not only know
0
past behaviors (the denominator of the probability ratio),
but also the outcomes (the numerator).
One
Two
Three
Four
If the results from this experiment can be generalized,
Fifty?trial block
they would imply that people who feel that the conse-
quences of their actions are unpredictable are less likely
Figure 6: Prudent decision-making exhibited by the
to make decisions driven by long-term consequences
Present/Future-Uncertainty groups across Fifty-Trial
(prudent decisions). Further, if this feeling of uncertainty
Blocks of the experiment.
can be reduced (through feedback) by increasing aware-
ness of the contingencies which operate in the world, then
prudent decision-making should increase. This seems to
errors based on type of feedback. The addition of Be-
be particularly true when the future is uncertain (it might
havioral/Outcome Feedback again seemed to bene?t pru-
be argued that the creation of Future-Uncertainty in the
dent decision making (described in previous paragraph)
present experiment is confounded with average payoff
by increasing participants’ understanding of the contin-
for prudent decision-making). Perhaps people living in
gencies present (but this time it is an understanding about
poverty look around them and see people working hard,
the points).
yet barely managing to make it from day to day (that is,
the payoffs of prudent behavior are small and hard to de-
4 General discussion
tect due to the uncertainty between present behaviors and
long-term consequences). They come to believe that the
Except in the Present/Future-Uncertainty with No-
long-term consequences of hard work (a prudent choice)
Feedback group, there seemed to be a general amount of
are unpredictable at best, or perhaps even negative. Any-
learning involved in the game. That is, the more opportu-
thing we can do to show people that though the world
nities we have to make decisions with both long-term and
is uncertain, it is de?nitely not unpredictable ought to in-
short-term consequences, the better we become at making
crease their prudent behaviors (or decrease imprudent be-
them. This general improvement with practice mirrors
haviors as the case may be).
that seen in real life with age. It seems that as a general
The question for future research then becomes, what
statement, when the world contains uncertainty, feedback
else can we do to convince people that uncertain does
increases prudent decision-making. The addition of both
not equal unpredictable (probabilistic does not equal ran-
types of uncertainty decreased prudent decision-making
dom)? Giving feedback about our own past behaviors and
further. Behavioral/Outcome Feedback led to improve-
the consequences can be dif?cult in many real world sit-
ments in the participants’ ability to predict the uncertainty
uations. For the smoker, the long-term consequences of
in the game (contingencies) in several cases and thus in-
smoking can not be calculated by looking to their own
creased prudent decision-making.
past. Can feedback about others’ behaviors also serve to
As predicted, the addition of both present and future
change our own behaviors and what are the limitations of
uncertainty decreased prudent decision-making with the
this in?uence?
addition of both types of uncertainty decreasing pru-
dent decision-making even further3. Also as predicted,
the Control to the Present-Uncertainty condition.
However, when
changing from the Control to the Future-Uncertainty condition, ex-
3 It should be recalled that expected value remained constant from
pected values changed and this change may be responsible for ?ndings.

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Judgment and Decision Making, Vol. 1, No. 1, July 2006
Effects of feedback on prudent decision-making
85
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