"Leaky" Rationality: How Research on Behavioral Decision Making Challenges Normative Standards of Rationality

ABSTRACT— For more than 30 years, decision-making research has documented that people often violate various principles of rationality, some of which are so fundamental that theorists of rationality rarely bother to state them. We take these characteristics of decision making as a given but argue that it is problematic to conclude that they typically represent departures from rationality. The very psychological processes that lead to "irrational" decisions (e.g., framing, mental accounting) continue to exert their influence when one experiences the results of the decisions. That is, psychological processes that affect decisions may be said also to "leak" into one's experience. The implication is that formal principles of rationality do not provide a good enough normative standard against which to assess decision making. Instead, what is needed is a substantive theory of rationality—one that takes subjective experience seriously, considers both direct and indirect consequences of particular decisions, considers how particular decisions fit into life as a whole, and considers the effects of decisions on others. Formal principles may play a role as approximations of the substantive theory that can be used by theorists and decision makers in cases in which the formal principles can capture most of the relevant considerations and leakage into experience is negligible.     

当局者迷,旁观者清?自我-他人决策的理性差异及其机制

生活充满抉择,由于知识经验的局限,人们常需寻求他人建议,抑或直接请他人代己决策.诸多研究探讨了自我决策、向他人建议,以及代他人决策之间的差异.探究这种差异的动因之一在于考察何种条件下的决策更优或更“理性”.以往研究表明,自我决策或他人决策(向他人建议或代他人决策)均有可能更易违背理性决策原则,隐含着他人决策优于自我决策的“当局者迷,旁观者清”这一传统智慧有一定的边界条件.研究者一般从认知(建构水平理论)、情绪(类型和卷入度),以及动机(调节聚焦理论)三种视角对自我-他人决策差异进行解释.本文作者提出基于理由的决策(reason-based account)假设来解释自我-他人决策在理性程度上的差异.未来研究可从决策过程及脑机制上深入考察自我-他人决策差异及其机制.     

Trading performance,disposition effect,overconfidence, representativeness bias,and experience of emerging market investors

Using brokerage account data from China, we study investment decision making in an emerging market. We find that Chinese investors make poor trading decisions: the stocks they purchase underperform those they sell. We also find that Chinese investors suffer from three behavioral biases: (i) they tend to sell stocks that have appreciated in price, but not those that have depreciated in price, consistent with a disposition effect, acknowledging gains but not losses; (ii) they seem overconfident; and (iii) they appear to believe that past returns are indicative of future returns (a representativeness bias). In comparisons to prior findings, Chinese investors seem more overconfident than U.S. investors (i.e., the Chinese hold fewer stocks, yet trade very often) and their disposition effect appears stronger. Finally, we categorize Chinese investors based on proxy measures of experience and find that “experienced” investors are not always less prone to behavioral biases than are “inexperienced” ones. Copyright © 2007 John Wiley & Sons, Ltd.     

Forecasting and Ethical Decision Making: What Matters?

This study examined how the number and types of consequences considered are related to forecasting and ethical decision making. Undergraduate participants took on the role of the key actor in several ethical problems and were asked to forecast potential outcomes and make a decision about each problem. Performance pressure was manipulated by ostensibly making rewards contingent on good problem-solving performance. The results indicated that forecast quality was associated with decision ethicality, and the identification of the critical consequences of the problem and consequences for others were associated with both higher quality forecasts and more ethical decisions. In addition, the identification of a larger number of consequences was negatively associated with ethical decision making. Performance pressure did not impact forecast quality or ethicality of decisions. Theoretical and practical implications of these findings are discussed.     

Working Hard to Take the Easy Way Out: How the Need for Cognitive Closure Shapes Strategic Effort Investment to Ease Future Decision Making

Consumers make countless decisions each day that force them to determine the amount of effort they are willing to invest into the decision process. Due to their desire for immediate resolution and propensity to seize upon available options, individuals high in the need for cognitive closure make decisions that are traditionally associated with reduced effort investment. Counter to this traditional perspective, this research demonstrates that those seeking closure strategically invest effort into the decision process, so long as the initial effort investment is expected to simplify similar decisions in the future. Three experiments demonstrate that those motivated by closure put forth greater effort when they expect to repeat the decision (Experiment 1) and in contexts where a justifiable choice option is not readily available (Experiment 2). Furthermore, this effort investment is shown to payoff in terms of streamlining subsequent decision making (Experiment 3). These findings detail the strategic use of effort by those seeking closure to ease future decision making and thus provide a conceptual framework for when and why those seeking closure allocate effort in decision making.     

Age differences in financial decision making: The benefits of more experience and less negative emotions

The emerging literature on aging and decision making posits that decision‐making competence changes with age, as a result of age differences in various cognitive and noncognitive individual‐differences characteristics. In a national life‐span sample from the United Kingdom (N = 926), we examined age differences in financial decisions, including performance measures of sunk cost and credit card repayment decisions, and self‐report measures of money management and financial decision outcomes. Participants also completed four individual‐differences characteristics that have been proposed as relevant to financial decision making, including two cognitive ones (numeracy and experience‐based knowledge) and two noncognitive ones (negative emotions about financial decisions). First, we examined how age was related to the four financial decision‐making measures and the four individual‐differences characteristics. Older age was correlated to better scores on each of the four financial decision‐making measures, more experience‐based knowledge, less negative emotions about financial decisions, whereas numeracy and motivation were not significantly correlated with age. Second, we found that considering both the two cognitive and the two noncognitive individual‐differences characteristics increased predictions of financial decision making, as compared with considering either alone. Third, we examined how these four individual‐differences characteristics contributed to age differences in financial decision making. Older adults' higher levels of experience‐based knowledge and lower levels of negative emotions seemed to especially benefit their financial decision making. We discuss implications for theories on aging and decision making, as well as for interventions targeting financial decisions.     

Memory of psychodiagnostic information: biases and effects of expertise

Problem-solving expertise has been associated with enhanced memory of domain-specific information. This enhanced memory is thought to play an important role in expert decisions. Meanwhile, research on psychodiagnostic decision making has found consistent limitations in experienced clinicians' ability to make optimal decisions. To what extent are these limitations associated with suboptimal memory processes? We compared memories of expert clinicians and novice graduate students for information learned while viewing a videotaped psychodiagnostic interview. Results of 3 tests suggest that expert clinicians exhibit enhanced memory that is flexible, selective, and accurate but with limitations that might contribute to poor decisions. Experts exhibited superior memory of personal criteria and disconfirmatory information. However, a framing manipulation induced performance in experts consistent with suboptimal decision making, and both groups needed exhaustive prompts for optimal memory search. Implications of these findings for expertise models are discussed.     

Escalation research: providing new frontiers for applying behavior analysis to organizational behavior

Decision fiascoes such as escalation of commitment, the tendency of decision makers to "throw good money after bad," can have serious consequences for organizations and are therefore of great interest in applied research. This paper discusses the use of behavior analysis in organizational behavior research on escalation. Among the most significant aspects of behavior-analytic research on escalation is that it has indicated that both the patterns of outcomes that decision makers have experienced for past decisions and the patterns of responses that they make are critical for understanding escalation. This research has also stimulated the refinement of methods by researchers to better assess decision making and the role reinforcement plays in it. Finally, behavior-analytic escalation research has not only indicated the utility of reinforcement principles for predicting more complex human behavior but has also suggested some additional areas for future exploration of decision making using behavior analysis.     

目标概念的辨析及其对决策的影响

目标对决策的影响过程包含了明晰目标的决策过程和在目标的动机作用下完成后续决策任务的过程。目标是个体期望实现的多个未来结果相互之间竞争动机作用的结果。依据对未来结果的渴望性和可行性等特征的认知, 个体抉择出某个未来结果作为自己的目标, 使其具有了动机作用。在明晰目标的过程中, 解释水平、自我控制的人格特质和成功经验都会产生重要影响。在明确了目标以后, 目标通过改变个体对有利于目标实现的决策备择方案的态度和选择性注意来影响个体的决策。未来研究可以从目标的意识程度对决策负面结果的影响, 对决策的心理过程进行直接测量等角度来探讨目标对决策的影响。     

Second Thoughts About Decision Reversibility: An Empirical Overview

People generally expect that having the opportunity to reverse a decision contributes to the quality of decision‐making. However, previous research has unequivocally shown that reversible decisions actually yield lower levels of post‐choice satisfaction and higher levels of regret than irreversible decisions. Only recently, research has begun to investigate the underlying processes explaining these counterintuitive and detrimental consequences of decision reversibility. In the present paper, we will review and integrate this research and distinguish a number of important cognitive and motivational consequences of decision (ir)reversibility. With this paper, we aim to inspire future research into the discrepancy between people's wish for reversibility on the one hand and their need for irreversibility on the other.     

Ethical? Toward whom?

Comments on the original article, "Nonrational processes in ethical decision making" by M. D. Rogerson et al (see record 2011-19198-001). Among the many insightful points made by Rogerson, Gottlieb, Handelsman, Knapp, and Younggren (October 2011) regarding nonrational processes in ethical decision making, one deserves further explication: Many of psychologists' ethical decisions lead to actions done to someone. Unfortunately, frameworks and models of ethical decision making frequently neglect this fact by implying that the decisions happen in the abstract, but in truth, these decisions often affect a specific recipient. Importantly, the characteristics of that specific recipient, especially as perceived by the psychologist, can have a powerful impact on the process of ethical decision making (Caughron et al., 2011). It would be wise to add such a hypothetical to the list of specific questions that Rogerson et al recommended psychologists ask themselves: Would I make the same ethical decision if the person(s) toward whom the decision is directed had different characteristics?     

Information search in decisions from experience. Do our patterns of sampling foreshadow our decisions?

Do different patterns of sampling influence the decisions people make, even when the information the decisions are based on is equivalent? Do more and less switching between options correlate with different kinds of decision policies? In past research, the correspondence between search and decision patterns has been difficult to ascertain because the information obtained has often been confounded with its consequences in an exploration-exploitation trade-off. We used a sampling task in which information is explored prior to being exploited. We found that search patterns did reveal decision policies. Individuals who transitioned more frequently between options were more likely to choose options that win most of the time in round-wise comparisons and were more likely to underweight rare, risky events. Less switching between options was associated with choosing options that win in the long run on the basis of summary comparisons--decisions consistent with expected-value maximization and linear weighting of outcomes.     

Doing unto future selves as you would do unto others: psychological distance and decision making

Four experiments showed that the decisions people make for future selves and other people are similar to each other and different from their decisions for present selves. Experiments involved decisions to drink a disgusting liquid for scientific purposes (Experiment 1), tutor peers during exam week (Experiment 2), receive e-mails for charity (Experiment 3), and defer a lottery prize for a larger one (Experiment 4). These findings seemed to be at least partially rooted in the tendency for decisions regarding the ongoing, present self to be uniquely influenced by internal subjective experience. Specifically, these effects emerged for real, but not hypothetical, decisions. Also, they were mitigated by manipulations that altered participants' attention to present or future subjective experience. In addition, when participants' subjective experience primarily involved empathy for others (Experiment 3), their decisions on behalf of present selves were more generous than their decisions for future selves and others. Applications are discussed.     

Daily Behavior Report Cards and Systematic Direct Observation: An Investigation of the Acceptability,Reported Training and Use,and Decision Reliability Among School Psychologists

More than ever, educators require assessment procedures and instrumentation that are technically adequate as well as efficient to guide data-based decision making. Thus, there is a need to understand perceptions of available tools, and the decisions made when using collected data, by the primary users of those data. In this paper, two studies that surveyed members of the National Association of School Psychologists with regard to two procedures useful in formative assessment, (i.e., Daily Behavior Report Cards; Systematic Direct Observation), are presented. Participants reported greater overall levels of training and use of Systematic Direct Observation than Daily Behavior Report Cards, yet both techniques were rated as equally acceptable for use in formative assessment. Furthermore, findings supported that school psychologists tend to make similar intervention decisions when presented with both types of data. Implications, limitations, and future directions are discussed.     

Overcoming focusing failures in competitive environments

This paper attacks one of the chief limitations of the field of behavioral decision research—the past inability to use this literature to improve decision making. Building on the work of Thompson, Gentner, Loewenstein and colleagues (Loewenstein, Thompson, & Gentner, 1999; Thompson, Gentner, & Loewenstein, 2000; Gentner & Markman, 1997), the current paper finds that it is possible to reduce bias in one of the most robust problems in the decision literature, the Acquiring a Company Problem (Samuelson & Bazerman, 1985). Past research has shown that individuals make suboptimal offers as a result of the failure to think about the decisions of others and to incorporate a clear understanding of the rules of the game. In the current study, we find that by allowing study participants to see and understand differences in seemingly unrelated decision problems—versions of the Monty Hall Game (Nalebuff, 1987; Friedman, 1998) and Multiparty Ultimatum Game (Messick, Moore, & Bazerman, 1997; Tor & Bazerman, 2003)—study participants can learn to focus more accurately on the decisions of other parties and the rules of the game, the keys to solving the Acquiring a Company Problem. This research offers a new piece of evidence that comparative and analogical processes may be a successful direction for improving decision making. Copyright © 2004 John Wiley & Sons, Ltd.     

经验决策：概念、研究和展望

传统风险决策研究范式中, 决策信息是事先限定的, 即在决策之前呈现各个决策选项的概率和收益, 被试基于这些信息进行决策。已有研究表明, 在传统风险决策任务中人们会高估小概率事件(rare event)。然而最近出现的一种基于不完整信息的决策形式, 即经验决策却对这一发现提出了挑战。研究发现, 人们在进行经验决策时会表现出对小概率事件的低估, 经验决策和传统决策形式之间存在差异。本文主要介绍经验决策的概念及其研究, 并从学习和不确定程度等角度对两种决策形式进行再认识, 以进一步理解经验决策并提出展望。     

认知闭合需要、框架效应与决策偏好

在带有模糊性的决策情境中,决策者个人的认知特征会对其判断决策产生重要影响。通过实验的方法,考察了认知闭合需要和特征框架效应对个体决策偏好的影响。93名工商管理硕士（MBA）参与了实验,研究的结果支持了本研究的3个假设,即认知闭合需要与特征框架效应不仅对被试的决策偏好存在显著的影响,而且二者还存在显著的交互作用。具体来说,研究发现,在模糊情境中：高认知闭合需要的被试偏好于立刻做出决策,而低认知闭合需要的被试偏好于暂缓做出决策;接收到正向框架信息的被试偏好于立刻做出决策,而接收到负向框架信息的被试偏好于暂缓做出决策;认知闭合需要与特征框架对被试的决策偏好还存在显著的交互作用。研究结论为根据个体认知闭合需要的水平来选拔决策者、利用框架效应来影响个体的信息加工方式进而提高决策质量提供了理论依据     

Misreporting signs of child abuse: The role of decision‐making and outcome information

Two studies provided evidence that a decision to report an ambiguous case of child abuse affected subsequent memory of the case information, such that participants falsely recognized details that were not presented in the original information, but that are schematically associated with child abuse. Moreover, post‐decision information that the child had later died from abuse influenced the memory reports of participants who had chosen not to report the case, increasing their reports of false schema‐consistent details. This suggests that false decision‐consistent memories are primarily due to sense‐making, schematic processing rather than the motivation to justify the decision. The present findings points to an important mechanism by which decision information can become distorted in retrospect, and emphasize the difficulties of improving future decision‐making by contemplating past decisions. The results also indicate that decisions may generate false memories in the apparent absence of external suggestion or misleading information. Implications for decision‐making theory, and applied practices are discussed.     

Adult Age Differences in Dual Information Processes: Implications for the Role of Affective and Deliberative Processes in Older Adults' Decision Making

ABSTRACT— Age differences in affective/experiential and deliberative processes have important theoretical implications for judgment and decision theory and important pragmatic implications for older-adult decision making. Age-related declines in the efficiency of deliberative processes predict poorer-quality decisions as we age. However, age-related adaptive processes, including motivated selectivity in the use of deliberative capacity, an increased focus on emotional goals, and greater experience, predict better or worse decisions for older adults depending on the situation. The aim of the current review is to examine adult age differences in affective and deliberative information processes in order to understand their potential impact on judgments and decisions. We review evidence for the role of these dual processes in judgment and decision making and then review two representative life-span perspectives (based on aging-related changes to cognitive or motivational processes) on the interplay between these processes. We present relevant predictions for older-adult decisions and make note of contradictions and gaps that currently exist in the literature. Finally, we review the sparse evidence about age differences in decision making and how theories and findings regarding dual processes could be applied to decision theory and decision aiding. In particular, we focus on prospect theory ( Kahneman & Tversky, 1979 ) and how prospect theory and theories regarding age differences in information processing can inform one another.     

Mindless decision making and environmental issues: gestalt/feature-intensive processing and contextual reasoning in environmental decisions

In the absence of relevant information in working memory during decision consideration, respondents tend to rely on a style of cognitive processing that may result in premature or inaccurate decision making (M. J. Sharps, 2003). M. J. Sharps and S. S. Martin (2002) demonstrated this effect in executive decision making. In the present study, the authors extended these methods to decisions about environmental issues. Respondents rated decisions about issues such as overpopulation, energy policy, and food production in the presence or absence of simple pertinent information. The presence of such information in the immediate context of environmental decisions, and therefore in working memory, significantly improved respondents' ability to understand negative decision consequences. These results demonstrate the importance of contextual information in environmental decision making.