Mental budgeting versus marginal decision making: training,experience and justification effects on decisions involving sunk costs

Many studies have shown that individuals make economically irrational decisions by using, rather than ignoring, sunk cost information. In this study, the effects of relevant academic training, financial experience and decision justification on investment decisions involving sunk costs were examined. Data on both the process (strategy) and outcome of the decisions were collected. The results indicate that practicing Certified Public Accountants (CPAs), Masters of Business Administration students (MBAs) and undergraduate accounting students perform better than undergraduate psychology students. The level of training, as measured by the number of college courses in managerial accounting, was found to be positively correlated with performance, while the level of experience, as measured by years of financially‐related work, was not. Justification was found to improve decisions only for those participants with significant work experience (MBAs and CPAs). Strategies used in this type of decision were examined with the surprising finding that economically rational decisions can be made even if sunk costs are not ignored. Copyright © 2007 John Wiley & Sons, Ltd.     

Response to restrictive policies: Reconciling system justification and psychological reactance

Here we propose a dual process model to reconcile two contradictory predictions about how people respond to restrictive policies imposed upon them by organizations and systems within which they operate. When participants’ attention was not drawn to the restrictive nature of the policy, or when it was, but their cognitive resources were restricted, we found evidence supporting a prediction based on System Justification Theory: Participants reacted favorably to restrictive policies, endorsing them and downplaying the importance of the restricted freedom. Only when we cued participants to focus their undivided attention on the restrictive nature of the policy did we find evidence supporting a prediction based on psychological reactance: Only then did participants display reactance and respond negatively to the policies.     

The sunk‐time effect: An exploration

We explored the potential for a sunk‐cost effect in the realm of time. Questionnaire studies (Experiments 1–4) obtained a sunk‐time effect that was robust to manipulations of prospective value, individual versus group consequences, and the effort or enjoyment inherent in the time. Behavioral experiments (Experiments 5–7) also suggested a sunk‐time effect and found support for a personal responsibility by sunk‐cost interaction on choice behavior. We discuss theoretical implications and a potential connection to animal sunk‐cost phenomena. Copyright © 2008 John Wiley & Sons, Ltd.     

经验基础与知识确证

Whether empirical givenness has the reliability that foundationalists expect is a point about which some philosophers are highly skeptical. Sellars took the doctrine of givenness as a “myth,” denying the existence of immediate perceptual experience. The arguments in contemporary Western epistemology are concentrated on whether sensory experience has conceptual contents, and whether there is any logical relationship between perceptions and beliefs. In fact, once the elements of words and conceptions in empirical perception are affirmed, the logical relationship between perceptual experience and empirical belief is also affirmed. This relationship takes place through perceptual experience acting as evidence for beliefs. The real problem lies in how one should distinguish between the different relationships with perception of singular beliefs and of universal beliefs, and in how singular beliefs can provide justification for universal beliefs. __________ Translated from Zhongguo Shehui Kexue 中国社会科学 (Social Sciences in China), 2007, (1): 65–75     

Group decision process and incrementalism in organizational decision making

In two studies examining resource allocation, support is found for the notion that group decisions are affected in systematic ways depending on whether or not there was individual consideration of the problem before meeting as a group. Specifically, compared to no prior consideration groups, prior consideration groups (1) escalate their commitment more in progress (i.e., ongoing) decisions, and (2) are less willing to concentrate resources on a single project in adoption (i.e., resource utilization) decisions. The findings challenge the blanket assertion that promoting divergent views in a group decision context is always related to better decisions.     

Regret aversion and decision process quality: Effects of regret salience on decision process carefulness

A considerable amount of past research has examined the effects of regret aversion on which options decision makers choose. However, past research has largely neglected to address the effect of regret aversion on the decision process. We conducted five experiments to examine the effect of making regret salient on decision process quality. We predicted that increased regret aversion would lead to more careful decision processing. The results consistently supported this prediction across the different decision situations, incentive structures, regret salience manipulations, and dependent variables used. In all experiments making regret salient led decision makers to take significantly longer to reach a decision. In Studies 2a, 2b, and 4 it also led participants to collect significantly more information before making a choice. Implications and future directions are discussed.     

Priming meritocracy and the psychological justification of inequality

The belief that status in society is based on merit is a central feature of the American Dream. This belief system justifies status inequalities by locating the cause of status differences in the individual talents and efforts of group members. We hypothesized that activating meritocratic beliefs increases the extent to which individuals psychologically justify status inequalities, even when those inequalities are disadvantageous to the self. Specifically, we hypothesized that priming meritocracy prompts individuals to engage in system-justifying psychological responses when they experience threat either at the personal or group level. Across two studies, priming meritocracy led members of a low status group to justify both personal and group disadvantage by decreasing perceptions of discrimination (Studies 1 and 2) and increasing the extent to which they stereotyped themselves and their group in status-justifying ways (Study 2).     

系统合理化何以形成——三种不同的解释视角

系统合理化理论认为, 人们会自然地将其所在的社会系统感知为公平合理的, 这一倾向即系统合理化。而系统合理化形成之原因, 一直是该领域理论和研究关注的重点。为此, 研究者先后提出了三种解释思路。认知失调视角认为, 系统合理化之所以产生是因为个体想要缓解因系统无法满足他们的需求而产生的焦虑。补偿性控制视角认为, 系统合理化源于个体自身控制感的缺乏。社会认知视角则认为人们固有的认知倾向特别是对于社会经济差异的内归因倾向是造成系统合理化的根源。未来可以考虑在同一个研究中包含来自于不同理论视角的解释变量, 借鉴相近领域的发现探索其他可能存在的系统合理化的形成机制, 探究中国文化特有的系统合理化的来源, 同时对积极的合理化与消极的合理化作出区分, 并在此基础上针对社会现实问题加强应用研究的开展。     

Problem formulation for multi-criteria decision analysis: report of a workshop

This paper reports on a workshop on Problem Formulation in Multi-Criteria Decision Analysis held at SPUDM97. The focus of the workshop was the problem formulation phase which occurs between the analyst meeting a person with a ‘mess’ and the time he or she begins to analyse a structured problem with several alternatives scored against several attributes or criteria. The objectives were: to share experience on procedures which might be transferable between the methodologies; to demonstrate different skills used by the analyst in structuring decision problems; and to catalyse a discussion on the problem formulation phase of an analysis. Three analysts, who generally approach problems using multiattribute methods, addressed the same problem. The problem used was constructed to be realistic to three decision makers, who had been trained in the issues of concern. There were two sessions. Each analyst was assigned a decision maker and formulated the problem independently in the first session, held in parallel. They were each observed by two observers and many of the audience at the workshop. The three formulations were presented along with the comments of the observers and discussed at a second plenary session. This paper reports the three formulations and observations, remarking on the ‘tricks of the trade’ employed by the analysts in formulating the problem. The analysts also describe their thinking and their aims in adopting their approach and style of interaction. More general remarks on the process of decision analysis are also offered. © 1998 John Wiley & Sons, Ltd.     

United with Christ in the spirit: The pneumatological dimension of the doctrine of justification

An important aspect of the consensus reached in the Joint Declaration on the Doctrine of Justification was the understanding of justification as union with Christ. From the Lutheran side, this understanding was dependent on the contributions of the Finnish school of Luther research. The Finns’ understanding of justification has been criticized for its insufficient pneumatological basis, and this criticism might also be applied to the Joint Declaration. This article points to resources in Luther's theology as well as perspectives from Pentecostal theology that might contribute to developing the pneumatological dimension of the doctrine of justification.     

Setting the record straight: System justification and rigidity-of-the-right in contemporary Hungarian politics

Despite international concern about the resurgence of right-wing authoritarianism and xenophobic prejudice throughout Central and Eastern Europe, researchers have argued recently that rightists may be less cognitively rigid and system-justifying than liberals and leftists in the context of Hungary (Kelemen, Szabó, Mészáros, László, & Forgas, 2014; Lönnqvist, Szabó, & Kelemen, 2019). We identify shortcomings of the research on which these claims are based and provide evidence that “rigidity-of-the-right” does indeed characterise contemporary Hungarian politics. Specifically, we hired professional survey firms to administer measures of personal needs for order and structure, system justification and political orientation to two large, nationally representative samples in Hungary. Results revealed that self-identified rightists scored higher than leftists on needs for order and structure and system justification (Study 1, N = 1005) and that supporters of right-wing parties (Fidesz and Jobbik) scored higher on both general and economic system justification than supporters of liberal and leftist parties (Study 2, N = 886). In exploratory analyses, we also observed that rightists expressed more intolerance than leftists toward groups that are commonly mistreated in Eastern Europe, including the Roma, religious minorities and sexual minorities.     

Fragile promise: The role of justification in promise-breaking

People who consider themselves moral sometimes use self-serving justifications to rationalize their selfish behaviours. Previous studies have tested the role of ambiguity in justifying wrongdoings, but it remains unclear whether ambiguity also plays a role in justifying promise-breaking behaviour and whether heterogeneity exists. To investigate justification in promise-breaking, we introduced a new experimental paradigm called the card-guessing task and used hierarchical cluster analysis to classify participants based on their promise-breaking decisions in unambiguous and ambiguous conditions. Experiment 1 revealed three clusters of solutions: Cluster 1 always kept their promises (i.e., keepers); Cluster 2 only exploited the vague promises and broke their promises in the ambiguous condition (i.e., intermediates); Cluster 3 tended to take advantage of vague promises and broke their promises irrespective of ambiguity (i.e., breakers). Experiment 2 confirmed that participants in the three clusters differed in their norm-abiding preferences and social value orientations. Keepers were more altruistic and had a stronger sense of norm compliance than intermediates and breakers. In conclusion, our study demonstrates that self-serving justifications were more likely to be employed by people who are moderately sensitive to deviation from social norms, which has implications for strategic interventions and policy formulation concerning unethical behaviour.     

Processes of patient decision making: Theoretical and methodological issues

Abstract

There is a paucity of research studying patients' decision making processes. Traditional normative approaches investigating human decision have presented rational, analytic processing as a ‘gold standard’ for decision making with decision aids developed to facilitate such thinking. This paradigm has been challenged by the recent emergence of naturalistic decision making. Naturalistic approaches argue for techniques modelled closer to how decisions are actually made in ‘real life’. Early work in this evolving field suggests the importance of more automatic, intuitive processing such as the use of heuristic short-cuts. This paper discusses the contribution of naturalistic decision theory and assesses its usefulness as an alternative to classical decision approaches in investigating patient decision making. Approaches for measuring underlying cognitive processes are also critically discussed.     

Effects of Spikes in the Price of Gasoline on Behavioral Intentions: A Mental Accounting Explanation

In recent years, gasoline prices have spiked in response to world events, only to fall again within weeks or months. Anecdotal evidence suggests that these price fluctuations have a substantial impact on consumers' planned spending and their overall perceptions of financial well‐being. We propose that consumers' behavioral intentions in response to these spikes are driven in part by how consumers mentally account for the fluctuations in gasoline prices. Specifically, we contend that people allocate sharp increases in the price per gallon of gasoline to a comprehensive mental account. As a result, such increases affect consumers' perceptions of their overall cost of living and have far‐reaching effects on their planned spending. These predictions are tested in three experiments. The paper concludes with the discussion of a theoretical and applied implications of the results. Copyright © 2011 John Wiley & Sons, Ltd.     

Outcome effects: The impact of decision process and outcome controllability

An ‘outcome effect’ refers to the phenomenon whereby performance evaluations of decision makers are affected by the outcomes of those decisions. Although some consider such an effect to be a judgmental error, judgment by outcomes may not be dysfunctional when the evaluator does not know how the decision maker chose his or her action. In such situations, outcomes may provide some noisy information about decision quality. We test whether an outcome effect will still occur when the decision methodology and quality are more explicitly identified. Further, we test whether outcome controllability, a previously unexplored moderator variable, will have an impact on the outcome effect. Our first experiment, using undergraduates as subjects, shows that decision quality and controllability have an impact on performance evaluations but that the ubiquitous outcome effect still obtains. These results were replicated with experienced business people, except that controllability only affected their judgments in the case of negative outcomes. Implications of these results are discussed. © 1997 John Wiley & Sons, Ltd.     

Denial of gender discrimination is associated with better subjective well-being among women: A system justification account

Despite the fact that women face socially and politically sanctioned disadvantages every day, a large percentage of women and men report that gender discrimination is no longer a problem. Across three studies, which together include over 20,000 participants from 23 countries, we test the hypothesis that denial (vs. acknowledgement) of gender discrimination is associated with higher subjective well-being among women (Studies 1–3), and this is because denying gender discrimination promotes the view that the system is fair (Study 1). We further show that this happens above and beyond personal experiences with sexism (Study 1) and that the association is stronger in countries where sexism is relatively high (vs. low; Study 3). We argue that denial of discrimination is an individual-level coping mechanism and that, like other self-group distancing strategies, it may perpetuate gender inequality.     

Gift Cards and Mental Accounting: Green‐lighting Hedonic Spending

In three studies, we examine the mental accounting rules that govern how gift cards are used. We predicted that their identity as gift cards would shift consumption from utilitarian to hedonic goods even in contexts where both types of goods are available and the consumer's needs are unchanged. In Study 1a, participants were asked to imagine that they had both a gift card and a specified amount of cash and needed to purchase both a hedonic item and a utilitarian item. When asked which currency they would use to buy which item, respondents were significantly more likely to say they would use the gift card to buy the hedonic item. Study 1b replicated this result and found that it was tied to participants' beliefs how different types of money should be used. In Study 2, we found that participants who were required to spend a certain amount of their compensation in a laboratory store spent more on hedonic goods if their payment was in the form of a gift card. In Study 3, we analyzed transactions at a campus bookstore and found that shoppers tended to spend disproportionately on hedonic goods when using their gift cards than when making credit card purchases. Taken together, these studies indicate that people tend to assign the monetary value of a gift card to a hedonic mental account and spend it accordingly. Copyright © 2014 John Wiley & Sons, Ltd.     

More than fair: Outcome dependence, system justification, and the perceived legitimacy of authority figures

Legitimacy is a source of power for authorities because it promotes voluntary deference on the part of followers. From a system justification perspective, there is also reason to believe that power is a source of perceived legitimacy. We report five studies demonstrating that in addition to procedural fairness and outcome favorability, outcome dependence is an independent contributor to perceived legitimacy. In two cross-sectional field studies and one panel study, we hypothesized and found that dependence on an authority figure is positively associated with appraisals of legitimacy, measured in terms of trust and confidence in, empowerment of, and deference to authority. These effects were demonstrated in educational, political, and legal settings. Two additional experiments provided direct causal evidence for the hypothesized effect on both perceived legitimacy and voluntary deference (i.e., acquiescence to additional requests). We also found that participants assigned to a high (vs. low) dependence condition judged their outcomes to be more favorable, despite the fact that the outcomes were identical in the two conditions; this effect was mediated by perceived legitimacy. Taken as a whole, these findings suggest that perceived legitimacy is enhanced not only when authorities exercise fair procedures and deliver favorable outcomes, but also when subordinates are dependent on them. Implications for society and the study of legitimacy and social power are discussed.     

心理会计与推理选择研究的新进展

心理会计与推理选择是行为决策理论的两个重要领域,本文主要综述它们在消费者偏好建构中的作用。研究表明,心理会计的原则常常调节对奢侈品的购买与消费;在这一调节过程中,推理可能发挥重要作用。本文还评述,在建构消费偏好的过程中,消费者有时选择最充分的理由,而不是选择最佳的选项;在其它一些情况下,消费者聚焦理由可能导致购买决策与消费体验之间的矛盾,以及偏好的非传递性。     

消费者决策分析的新视角:双通道心理账户理论

双通道心理账户是指人们在购买决策时具有一个双向通道的心理账户,其中一个通道记录了付款后消费者剩余的正效用,而另一个通道则记录了除去消费后付款带来的负效用.当消费与支付联结紧密时,会让人们更易想起支付的痛苦,从而降低消费快感,此时快乐弱化系数(α)大;当消费与支付联结较弱时,人们更不易记起支付的金额,从而在消费时拥有更多快乐,此时痛苦钝化系数(β)大.文章通过整理已有研究发现:先付款后消费的α系数更小,而先消费后付款的β系数更小;奢侈品的α系数更大,而必需品的β系数更大;吝啬者的α系数更大,而挥霍者的β系数更大.文章进一步阐述了影响消费者购买联结的心理机制是债务规避和负的时间偏好、支付贬值等.在此基础上为消费者做出购买决策以及商家选择促销方式提出了建议.同时也为消费者决策行为研究提供了新的视角和研究课题.