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Keywords:

  • ambiguity;
  • imprecision;
  • uncertainty;
  • intertemporal choice;
  • construal level theory

ABSTRACT

Many personal, managerial, and societal decisions involve uncertain or ambiguous consequences that will occur in the future. Yet, previous empirical research on ambiguity preferences has focused mainly on decisions with immediate outcomes. To close this gap in the literature, this paper examines ambiguity attitudes toward future prospects, particularly how they may differ from the attitudes toward comparable prospects in the present. On the basis of a recent paradigm, we first distinguish between two types of ambiguity: imprecise probabilities and imprecise outcomes. Then, in accordance with construal level theory, which shows that temporal distance increases the relative importance of outcomes over probabilities in evaluating prospects, we conjecture that temporal distance would moderate attitudes toward imprecise probabilities but amplify attitudes toward imprecise outcomes. Through a series of experiments, we demonstrate that when the prospects are in the future, individuals are less averse toward imprecise probabilities and more seeking toward imprecise outcomes. However, the effect is most prominent for prospects where both the probability and outcome dimensions are concurrently imprecise. The paper ends with a discussion on how dimension salience may have contributed to this result. Copyright © 2012 John Wiley & Sons, Ltd.