Source dependence
Also known as: Source preference
We'd rather bet on uncertainty in domains we feel we understand than ones we don't.
What it means
Source dependence is the finding that willingness to bet on an uncertain event depends not only on its judged probability but on the source of the uncertainty — the domain from which it arises. People prefer to wager on events in areas where they feel competent or knowledgeable over events of equal probability in unfamiliar domains, a pattern Heath and Tversky called the competence hypothesis. It generalizes ambiguity aversion by showing that vague probabilities are not uniformly disliked: ambiguity can even be sought when one feels expert. The effect implies that the same person can be ambiguity-averse for foreign-market bets yet ambiguity-seeking for bets in their own profession. It enriches models of decision under uncertainty by making attitudes contingent on the knowledge context, not just the odds.
Examples
A doctor prefers to bet on an uncertain medical outcome over a coin flip with identical odds, but would rather take the coin flip than bet on an unfamiliar foreign election.
A football obsessive happily bets on Saturday's result at even odds but refuses a coin toss for the same stake — the match feels knowable in a way the coin does not.
An engineer takes a bet on whether their own product ships on schedule, then declines identical odds on next quarter's coffee price; competence, not probability, decides which uncertainty feels acceptable.
First described in Heath & Tversky (1991); Fox & Tversky (1995).