Job-related Decisions under Uncertainty:

This study investigates the effects of ambiguity attitudes on job-related decisions in real life. Both the decision to become self-employed and to accept a job when looking for work involve ambiguity (i.e. the probabilities of success are unknown). The source method is used to measure ambiguity attitude in a large sample representative of the general American population. The results show that individuals who are ambiguity seeking or neutral are more likely to be self-employed than those who are ambiguity averse. The global ambiguity measures for ambiguity aversion and a-insensitivity, however, have no influence. Also, no effect is found for ambiguity aversion in the domain of gains or losses or for a-insensitivity when studying the reservation wage at which unemployed individuals would accept a job. Several suggestions are made to explain the results obtained in this study. Especially the use of different ambiguity aversion measures for different likelihood levels would improve the measurement of ambiguity attitude and the study of its effect on real-life decisions. Finally, the difference in beliefs about ambiguity may play a critical role in the decision-making process, interfering with the effect of ambiguity attitudes.