Framing effects in group investment decision making: role of group polarization

Prospect theory proposes that framing effects result in a preference for risk-averse choices in gain situations and risk-seeking choices in loss situations. However, in group polarization situations, groups show a pronounced tendency to shift toward more extreme positions than those they initially held. Whether framing effects in group decision making are more prominent as a result of the group-polarization effect was examined. Purposive sampling of 120 college students (57 men, 63 women; M age = 20.1 yr., SD = 0.9) allowed assessment of relative preference between cautious and risky choices in individual and group decisions. Findings indicated that both group polarization and framing effects occur in investment decisions. More importantly, group decisions in a gain situation appear to be more cautious, i.e., risk averse, than individual decisions, whereas group decisions in the loss situation appear to be more risky than individual decisions. Thus, group decision making may expand framing effects when it comes to investment choices through group polarization.     

Self–other differences in multiattribute decision making: Compensatory versus noncompensatory decision strategies

When making decisions where options involve multiple attributes, a person can choose to use a compensatory, utility maximizing strategy, which involves consideration and integration of all available attributes. Alternatively, a person can choose a noncompensatory strategy that extracts only the most important and reliable attributes. The present research examined whether other‐oriented decisions would involve greater reliance on a noncompensatory, lexicographic decision strategy than self‐oriented decisions. In three studies (Mturk workers and college students), the difference in other‐oriented versus self‐oriented decisions in a medical decision context was explained by a subsample of participants that chose the death minimizing operation on all 10 decisions (Study 1) and a subsample of participants who self‐reported that they used a strategy that minimized the chance of death on every decision (i.e., a lexicographic mortality heuristic; Study 2). In Study 2, tests of mediation found that self‐reported use of the mortality heuristic completely accounted for the self–other effect on decisions. In Study 3, participants were more likely to report prospectively that they would adopt the mortality heuristic when making decisions for others than for themselves, suggesting that participants were not mistakenly inferring a lexicographic decision strategy from their past behavior. The results suggest that self–other effects in multiattribute choice involve differential use of compensatory versus noncompensatory decision strategies and that beyond this group difference, individual differences in the use of these strategies also exist within self‐oriented and other‐oriented decisions.     

The inaction effect in the psychology of regret

Previous research showed that decisions to act (i.e., actions) produce more regret than decisions not to act (i.e., inactions). This previous research focused on decisions made in isolation and ignored that decisions are often made in response to earlier outcomes. The authors show in 4 experiments that these prior outcomes may promote action and hence make inaction more abnormal. They manipulated information about a prior outcome. As hypothesized, when prior outcomes were positive or absent, people attributed more regret to action than to inaction. However, as predicted and counter to previous research, following negative prior outcomes, more regret was attributed to inaction, a finding that the authors label the inaction effect. Experiment 4, showing differential effects for regret and disappointment, demonstrates the need for emotion-specific predictions.     

Assessing ADHD across settings: contributions of behavioral assessment to categorical decision making

Adapted methods of behavioral assessment to assess home and school functioning in a way that maps directly to the Diagnostic and Statistical Manual of Mental Disorders (4th ed., [DSM-IV]; American Psychiatric Association, 1994). The study was conducted in a school-based sample with 5- to 12-year-old children referred to a school intervention team. A multigate set of procedures was used to assign children to one of 3 groups: attention deficit hyperactivity disorder (ADHD), inattentive group; ADHD, combined group; and a non-ADHD control group. The ADHD Rating Scale-IV was used to assess parent and teacher ratings of ADHD symptoms as delineated in DSM-IV. The findings suggest that the use of a fixed cutoff point (i.e., 6 or more symptoms), which is employed in the DSM-IV, is often not the best strategy for making diagnostic decisions. The optimal approach depends on whether diagnostic information is being provided by the parent or teacher and whether the purpose of assessment is to conduct a screening or a diagnostic evaluation. Also, the results indicate that a strategy that aggregates symptoms in the order in which they are accurate in predicting a diagnosis of ADHD is a more effective strategy than the approach used in DSM-IV, which aggregates any combination of a specific number of items. Implications for using methods of behavioral assessment to make diagnostic decisions using DSM-IV criteria are discussed.     

Attending to multiple sources of information: I. The integration of information in decision making

Information relevant to a decision is often available from several sources, such as different sensory modalities or different spatial locations. Processing or utilization of such information is often selective in that some sources seem to have more influence on a decision or response than others. Many different theoretical mechanisms have been proposed to account for such selective (i.e., attentional) aspects of human information processing. This paper considers theoretical mechanisms which operate to integrate separate sources of information in order to make a binary decision. In particular, these mechanisms are studied in simple visual and auditory detection tasks as well as a Bayesian decision problem. Data from these experiments reject the idea that one integrates the relevant information from several sources prior to making a decision. Rather, one seems to form separate decisions about the information from each source and then integrate these decisions in order to select a response.     

Group decision making in hidden profile situations: dissent as a facilitator for decision quality

The effect of diversity in individual prediscussion preferences on group decision quality was examined in an experiment in which 135 three-person groups worked on a personnel selection case with 4 alternatives. The information distribution among group members constituted a hidden profile (i.e., the correct solution was not identifiable on the basis of the members' individual information and could be detected only by pooling and integrating the members' unique information). Whereas groups with homogeneous suboptimal prediscussion preferences (no dissent) hardly ever solved the hidden profile, solution rates were significantly higher in groups with prediscussion dissent, even if none of these individual prediscussion preferences were correct. If dissent came from a proponent of the correct solution, solution rates were even higher than in dissent groups without such a proponent. The magnitude of dissent (i.e., minority dissent or full diversity of individual preferences) did not affect decision quality. The beneficial effect of dissent on group decision quality was mediated primarily by greater discussion intensity and to some extent also by less discussion bias in dissent groups.     

Brain signals do not demonstrate unconscious decision making: An interpretation based on graded conscious awareness

Neuroscientific studies have shown that brain activity correlated with a decision to move can be observed before a person reports being consciously aware of having made that decision (e.g., Libet, Gleason, Wright, & Pearl, 1983; Soon, Brass, Heinze, & Haynes, 2008). Given that a later event (i.e., conscious awareness) cannot cause an earlier one (i.e., decision-related brain activity), such results have been interpreted as evidence that decisions are made unconsciously (e.g., Libet, 1985). We argue that this interpretation depends upon an all-or-none view of consciousness, and we offer an alternative interpretation of the early decision-related brain activity based on models in which conscious awareness of the decision to move develops gradually up to the level of a reporting criterion. Under this interpretation, the early brain activity reflects sub-criterion levels of awareness rather than complete absence of awareness and thus does not suggest that decisions are made unconsciously.     

Elastic Justification: How Unjustifiable Factors Influence Judgments

When making judgments, one may encounter not only justifiable factors, i.e., attributes which the judge thinks that he/she should take into consideration, but also unjustifiable factors, i.e., attributes which the judge wants to take into consideration but knows he/she should not. It is proposed that the influence of an unjustifiable factor on one's judgment depends on the presence of elasticity (ambiguity) in justifiable factors; the influence will be greater if there is elasticity than if there is not. Two studies involving different contexts demonstrated the proposed elasticity effect and suggested that the effect could be a result of a self-oriented justification process. Implications of this research for decisions involving a should-vs-want conflict are discussed.     

Taking the easy way out: preference diversity, decision strategies, and decision refusal in groups

It has often been argued and found that preference diversity is beneficial for the quality of group decisions. However, this literature has neglected the fact that in many situations, it is also possible not to choose. Further, preference diversity can be based on attractions, aversions, or both. The authors argue that some types of preference diversity can lead to biased discussions and choice refusal (i.e., the group refuses to choose any of the available options). In a laboratory experiment, three different patterns were observed. When group members held different aversions before discussion, discussions were aversion driven and group members quickly agreed to refuse all alternatives. When each alternative had both a proponent and an adversary, discussions were longer and unbiased but still often led to refusal, which was accompanied by relatively low levels of outcome satisfaction. Only when preference diversity was based only on attractions did it lead to unbiased discussion, low prevalence of refusal, and high outcome satisfaction. Implications for group decision making are discussed.     

Turning an advantage into a disadvantage: Ambiguity effects in lexical decision versus reading tasks

When performing a lexical decision task, participants can correctly categorize letter strings as words faster if they have multiple meanings (i.e., ambiguous words) than if they have one meaning (i.e., unambiguous words). In contrast, when reading connected text, participants tend to fixate longer on ambiguous words than on unambiguous words. Why are ambiguous words at an advantage in one word recognition task, and at a disadvantage in another? These disparate results can be reconciled if it is assumed that ambiguous words are relatively fast to reach a semantic-blend state sufficient for supporting lexical decisions, but then slow to escape the blend when the task requires a specific meaning be retrieved. We report several experiments that support this possibility.     

Distraction as a determinant of processing speed

Processing speed is often described as a fundamental resource determining individual (e.g., I.Q.) and group (e.g., developmental) differences in cognition. However, most tests that measure speed present many items on a single page. Because many groups with slowed responding are also distractible, we compared younger and older adults on high-distraction (i.e., standard) versus low-distraction versions of two classic speed tasks. Reducing distraction improved the performance of older adults but had little or no effect on younger adults, suggesting that the ability to limit attentional access to task-relevant information can affect performance on tests designed to measure processing speed.     

Group vs individual information processing: The effects of outcome feedback on decision making

Recent theories of individual decision making have emphasized the role of environmental feedback on decision performance and confidence. However, in relation to group decision making, feedback has received only minor attention. This study compared individual and group decision performance and confidence on a multicue personnel decision task under three different feedback conditions. Individuals and five-person groups decided whether to promote 48 different job candidates, and rated how confident they were in each of their decisions. Feedback as to the correctness of their decisions was provided after (a) every decision (Total Feedback), (b) only those decisions to promote the candidate (Partial Feedback), or (c) after none of the decisions (No Feedback). Results indicated that groups performed best under total feedback, while individuals performed best under partial feedback. In addition, greater amounts of feedback reduced individuals' confidence but had little effect on group member confidence. Implications for both current theory in decision making and group vs individual information processing are discussed.     

The enduring impact of transient emotions on decision making

People often do not realize they are being influenced by an incidental emotional state. As a result, decisions based on a fleeting incidental emotion can become the basis for future decisions and hence outlive the original cause for the behavior (i.e., the emotion itself). Using a sequence of ultimatum and dictator games, we provide empirical evidence for the enduring impact of transient emotions on economic decision making. Behavioral consistency and false consensus are presented as potential underlying processes.     

Biased information search in group decision making

Research has shown that people prefer supporting to conflicting information when making decisions. Whether this biased information search also occurs in group decision making was examined in three experiments. Experiment 1 indicated that groups as well as individuals prefer supporting information and that the strength of this bias depends on the distribution of the group members' initial decision preferences. The more group members had chosen the same alternative prior to the group discussion (group homogeneity), the more strongly the group preferred information supporting that alternative. Experiment 2 replicated these results with managers. Experiment 3 showed that the differences between homogeneous and heterogeneous groups reflect group-level processes. Higher commitment and confidence in homogeneous groups mediated this effect. Functional and dysfunctional aspects of biased information seeking in group decision making are discussed.     

How to achieve synergy in group decision making: Lessons to be learned from the hidden profile paradigm

Based on over 25 years of research on hidden profiles and information sharing in groups, and particularly our own work in this area, we outline a general model of how groups can achieve better decisions in a hidden profile situation than their individual members would have been capable of (i.e., synergy). At its core the model defines intensity and bias as the two key parameters that have to be optimised with regard to both the discussion of information and the processing of information in order to ensure synergy in group decision making. We review the empirical literature on information sharing and group decision making in the hidden profile paradigm (with a particular focus on our own studies) to illustrate how group decision quality can be enhanced by increasing intensity and decreasing bias in the discussion and processing of information. Finally we also outline why we think that the lessons learned from research using the hidden profile paradigm can be generalised to group decision-making research in general, and how these lessons can stimulate studies in other fields of group decision-making and group performance research.     

DOES CONTEXT AFFECT STAFFING DECISIONS? THE CASE OF GENERAL MANAGERS

A resource dependency framework (Pfeffer & Salancik, 1978) is applied to general manager (GM) selection decisions. Hypotheses are developed predicting associations between organizational contextual features (environmental instability, strategy, organizational performance, size) and background characteristics of GMs selected to head business units (organizational familiarity, functional experience, age). Data were collected on 40 recent GM selection decisions. Findings indicate that organizational contextual features influence the type of GM selected. Key results are that industry instability, organizational strategy, and organizational size were associated with GMs'organizational familiarity (i.e., tenure levels), and that organizational strategy was associated with the age of selected GMs. This study provides support for the application of a contingency perspective to human resource management.     

Equality as a benchmark for third-party punishment and reward: The moderating role of uncertainty in social dilemmas

The present paper focuses on third-parties’ decisions to punish and reward in social dilemmas, and on the moderating role of environmental uncertainty (i.e., uncertainty about the size of the common resource). We argue and demonstrate that in social dilemmas third-parties use the equality rule as a strict benchmark to determine punishments (Study 1) as well as rewards (Study 2), but only under environmental certainty. Under environmental uncertainty, third-parties do not apply such a strict benchmark to distinguish cooperators from defectors. Instead, they appear to use the following rule: the more an individual group member has cooperated the less he/she should be punished (Study 1) and the more he/she should be rewarded (Study 2). As such, these findings are the first to demonstrate that third-party sanctioning decisions are moderated by environmental uncertainty.     

Judgments about judgments: the dissociation of consideration price and transaction commitment judgments

There are many contexts in which people make judgments about prior judgments. For example, Internet shopping bots (e.g., NexTag.com) allow consumers to search for products and, if the price is too high, list a price at which they would consider making the purchase (i.e., base judgment). If the price drops to this level, the vendor generates an e-mail inviting the consumer to execute the transaction at the reduced price (i.e., contingent judgment). The authors show that the consideration price depends on the content of retrieved information, whereas the willingness to execute the transaction at the consideration price depends on the ease-of-retrieving the information. The authors use different offer prices to encourage the consumer to retrieve information consistent with different product quality levels. The authors also select offer prices so that information retrieval is more difficult at moderate offer prices than at high or low offer prices. Accordingly, the authors show that the consideration price increases as the offer price increases, but the willingness to execute the transaction at the consideration price is greater when there are high and low, as opposed to moderate, offer prices.     

Self‐regulation of consumer decision making and behavior: The role of implementation intentions

People may use the self-regulatory strategy of forming implementation intentions (i.e., if-then plans) to make better consumer decisions and facilitate the translation of those decisions into action. First, research on the mechanisms and effects of implementation intentions is reviewed. Second, we discuss how implementation intentions can be used to improve consumer decision making by promoting attention control and information elaboration, and overcoming disruptive influences. Third, we consider the various problems that militate against the enactment of one's decisions, and evidence is presented to show that implementation intentions are still effective even when goal attainment does not seem to be amenable to self-regulation. Finally, potential moderators of implementation intention effects are discussed.