A PROBIT MODEL FOR ESTIMATING THE EFFECT OF COMPLEXITY ON RISK-TAKING

This study was designed to explore the risk strategy employed in compl ex settings by conducting an empirical analysis of 1212 decisions made in the UK offcourse betting marker. The decision-making environment c hosen for the study is identified as offering the advantages of a natu ralistic setting and providing scope for observing risk strategy in a range of alternative- and attribute-based complexity conditions. Speci fically, the investigation employs a probit model to test the hypothes is that increasing either attribute- or alternative-based complexity r esults in the employment of a strategy more averse to risk-taking. The results suggest that this is the case and that complexity associated with alternatives has a particularly significant effect on the way bet ters respond to the existence of risk. It is observed that these findi ngs corroborate earlier studies of decision processes and decision out comes.