Uncertainty Assessment Accuracy and Resource Allocation Outcomes: An Empirical Test of a Presumed Relation

Abstract

I conducted a correlational study to test the hypothesis that resource allocation outcomes become more favorable as uncertainty assessment accuracy (i.e., resolution and calibration) increases. For each of 32 college basketball games, participants predicted which team would win, estimated the subjective probability that their prediction was correct, and were given the opportunity to place a wager. The dependent variable was profit earned over the 32 bets. Proportion correct and mean certainty were controlled in the analyses. Results indicated that individuals with higher resolution scores earned significantly more profit than those with lower scores. Higher profits were also associated with better calibration.