Understanding the relationship between experiences and choices under uncertainty

Abstract

Complexity and uncertainty are fundamental in transition decision-making. These are however rarely used as lenses for studying innovations and transitions with a behavioral lens. Existing literature focuses on system-related uncertainty and complexity, rather than on how decision-makers themselves perceive uncertainty in complex projects. This paper aims to understand the direct relationship between decision-making conditions and choices made under uncertainty, using a hypothetical mobility innovation project. We designed a discrete choice experiment to identify what the most significant factors are for decision-makers when deciding ways forward, in line with theoretical answers to complexity focused on risk sharing, risk assessment, or risk avoidance. In total, 108 Dutch mobility professionals working on innovations were presented 8 scenarios, resulting in 848 observed choices. The final choices were estimated by a mixed logit panel model with error components. The key finding of this study is that decision-makers consider trust to be the most crucial factor in making strategic choices under uncertainty. The estimation of a long-term sustainability effect of an innovation did not significantly influence the decision to proceed with a mobility innovation project in our study. Therefore, translating long-term sustainability goals into concrete tasks and ensuring their implementation requires attention and warrants further research.