phenomenon

disjunction effect

The disjunction effect is a decision-making phenomenon where uncertainty or additional information leads to violations of the sure-thing principle.
13 related articles · 1 formulas · 5 who worked here

Description

The disjunction effect is a cognitive bias in which people avoid making a definite choice when the outcome depends on one of uncertain, mutually exclusive events. Formally, it is a violation of Leonard Savage's 'sure-thing principle': if in each possible situation the same option is preferred, then it should also be preferred in the absence of information about which situation has occurred. The effect is especially strong under conditions of prospective (future) uncertainty.

History

The sure-thing principle dates back to Leonard Savage's (1954) work on the foundations of statistics. The disjunction effect was experimentally identified by Amos Tversky and Eldar Shafir in their 1992 paper 'The Disjunction Effect in Choice Under Uncertainty'. They conducted a series of surveys, including the Hawaii problem (vacation after an exam) and the betting problem (gambling after a coin toss). Later, the effect was replicated in neuroeconomic studies, and in the 2000s, quantum-like models of decision-making emerged, where superposition of states explains violations of classical probability laws.

How it works

Standard expected utility theory prescribes acting based on weighted probabilities of outcomes. In a disjunction, the agent faces an event space {A, ¬A}. If under both A and ¬A action X dominates, then in a state of ignorance the choice of X should remain. The observed refusal of X is explained by several mechanisms: the hypothesis of considering unconsidered scenarios (people imagine the worst-case development), emotional anticipation (regret over a decision made when the outcome is unknown), or quantum-like superposition of mental states, where utility evaluation interferes and leads to non-classical choice probabilities.

In practice

It explains why people don't buy insurance without knowing the exact probability of risks, or why investors wait for clarity even if it means missed profit. It is taken into account in economics, marketing, and political science.

Fun fact

In an experiment by Tversky and Shafir, students who knew they had either passed or failed an exam preferred to buy a vacation trip more often than those who had not yet been told the result. Knowledge freed them from choice paralysis.

Concept graph →

Formulas

$$p_1 p_2 = \frac{\gamma}{1+\gamma}$$
Product of pre- and post-shock pressures depends on adiabatic index.
What is in the formula
p_1variablePre-shock pressure — pressure pascal
p_2variablePost-shock pressure — pressure pascal
\gammavariableAdiabatic index (ratio of specific heats) — adiabatic index
p_{\rmpre}p_{\rmpost}=\frac{γ}{1+γ} · 2606.29607

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