Risk Versus Uncertainty: Unpacking the Paradigms in Economic and Managerial Decision-Making
Risk Versus Uncertainty: Unpacking the Paradigms in Economic and Managerial Decision-Making

Summary/Abstract: This comparative analysis delves into the nuances of risk propensity measurement within managerial decision making, juxtaposing three prominent tools: the Specific Risk-Taking (SRT) Scale, the Balloon Analogue Risk Task (BART), and the Domain-Specific Risk-Taking (DOSPERT) scale. The study critically evaluates the effectiveness of these instruments in distinguishing between risk—where probabilities are known—and uncertainty—where they are not. BART, with its behavioral focus and dynamic engagement, is posited as superior for its objective evaluation of risk behaviors and practical implications in various settings. However, the DOSPERT scale's domain-specific assessment and the SRT Scale's psychological insights provide valuable, context-dependent alternatives. The study identifies a need for these tools to be integrated with more contextually valid measures to bridge the gap between assessed risk propensity and real-world decision-making. The paper contributes to the discourse on risk measurement and decision-making under uncertainty, emphasizing the importance of tool selection based on context and cognitive load.

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