Pupil and Neural Dynamics Reveal Belief-Dependent Decision Making Under Ambiguity

Humans make thousands of decisions under ambiguity every day, where most times the probabilities of getting beneficial outcomes are not fully known. Although ambiguity aversion is well characterized at the aggregate level, it remains unclear how individuals internally represent ambiguous outcomes and how these representations shape behavior and physiology. To address these questions, we investigate value-based decision-making under risk and ambiguity using a multimodal approach that combines behavioral, pupillometric, and electroencephalographic (EEG) data. We show that individuals adopt distinct decision strategies that reflect different internal beliefs about unknown outcomes. These belief differences are expressed not only in choice but also in pupil-linked arousal during decision formation. Crucially, physiological differences across strategies persist under an objective valuation rule for ambiguous options but disappear when valuation is computed using each individuals subjective beliefs, indicating that arousal tracks subjective belief rather than objective task structure. Together, our findings show that ambiguity aversion is not a uniform bias but reflects heterogeneous internal belief models, and that multimodal physiology provides a window into the mechanisms through which these beliefs guide value-based choice.