Tell Me What I Wanted to Hear: Confirmation Effect in Lay Evaluations of Financial Expert Authority

In real life, people engage in interactive decision processes by consulting with experts. However, before taking advice, they must recognise the authority of an expert to assess the quality of the advice. The main goal of this research was to investigate how the confirmation effect affects lay evaluations of the epistemic authority of financial experts. Experiment 1 showed that lay people tend to ascribe greater epistemic authority to those experts whose advice confirms people's opinions, both measured and manipulated. Experiment 2 revealed that when participants' own opinions are not salient, people tend to evaluate experts' authority as higher when their advice confirms social norms. In Experiment 3 we jointly investigated the effects of participants' own opinions and social norms on the evaluations of authority. When both sources of expertise were made salient, decision‐makers favoured advice confirming their own beliefs and used it to evaluate experts' authority. Three interpretations of the role confirmation plays in the experts' authority evaluations are proposed: (1) self‐defensive strategies; (2) processing fluency; and (3) psychological consequences of naïve realism. The paper discusses practical implications of the results. We propose that increasing consumers' knowledge about biases might protect their evaluations of financial advice from being susceptible to the confirmation effect.     

Weighting information from outside sources: a biased process

How do people utilize information from outside sources in their decisions? Participants observed a signal‐plus‐noise or noise‐alone event and then made a yes–no decision about whether a signal had occurred. Participants were provided with two information sources to aid decision making. Each source consisted of four components that provided estimates of signal likelihood. In Experiment 1, the two sources had equal overall accuracy but differed in the expertise and internal correlation of their components. A regression analysis indicated that participants overweighed the high‐expertise‐high‐correlation source. This bias occurred on trials when the aggregate opinions of the sources disagreed. In Experiment 2, both the overall accuracy of the source and its components were manipulated. Participants overweighed information from the higher accuracy source. These biases reflect people's sensitivity to across‐trial and within‐trial differences in the accuracy and internal consistency of information sources. Experiment 3 provided additional evidence supporting these conclusions. Copyright © 2004 John Wiley & Sons, Ltd.     

Exploiting the Wisdom of Others to Make Better Decisions: Suspending Judgment Reduces Egocentrism and Increases Accuracy

Although decision makers often consult other people's opinions to improve their decisions, they fail to do so optimally. One main obstacle to incorporating others' opinions efficiently is one's own opinion. We theorize that decision makers could improve their performance by suspending their own judgment. In three studies, participants used others' opinions to estimate uncertain quantities (the caloric value of foods). In the full‐view condition, participants could form independent estimates prior to receiving others' opinions, whereas participants in the blindfold condition could not form prior opinions. We obtained an intriguing blindfold effect. In all studies, the blindfolded participants provided more accurate estimates than did the full‐view participants. Several policy‐capturing measures indicated that the advantage of the blindfolded participants was due to their unbiased weighting of others' opinions. The full‐view participants, in contrast, adhered to their prior opinion and thus failed to exploit the information contained in others' opinions. Moreover, in all three studies, the blindfolded participants were not cognizant of their advantage and expressed less confidence in their estimates than did the full‐view participants. The results are discussed in relation to theories of opinion revision and group decision making. Copyright © 2011 John Wiley & Sons, Ltd.     

The Sounds of Silence: Inferences from the Absence of Word‐of‐Mouth

While past work has explored some of the reasons why people themselves may remain silent in a group, almost no research has examined the mirror image of this question: How do consumers construe the silence of others? Do they project the opinions of the speakers in a conversation onto the silent individuals, assuming that silence signals agreement? Do they have a usual or “default” naïve theory of silence that they use to explain it across multiple contexts—i.e., “silence usually signals disagreement?” Or does silence act as a mirror, reflecting observers’ own opinions back at them? Three experiments contrasted perceivers’ estimates of conversational silence with their estimates of unknown opinions outside the conversation. Estimates of opinions outside the conversation generally followed an agreement‐with‐the‐speakers rule—the more an opinion was expressed in the group, the more consumers assumed others would support it too. In contrast, silence inside the conversation was interpreted very differently, serving as a mirror for participants’ own thoughts, even when the vocal majority favored the opposite position. Results suggest a process whereby observers project the reason they personally would have been silent in the group (given their opinion) onto silence, leading to an inference that the silents agree with the self.     

The Role of Evidence Diversity and Explanation in 4- and 5-Year-Olds’ Resolution of Counterevidence

Three experiments examined whether 4- and 5-year-olds can explicitly revise uncertain beliefs in light of disconfirming evidence. We considered 2 factors that might influence belief revision: a) the type and variability of evidence provided, and b) whether children generated an explanation of their initial hypothesis. When provided with limited observed evidence, children revised their belief about their initial guess greater than chance expectations, but differences were not observed when the quality of the explanation was considered (Experiment 1). In a similar paradigm, children revised their beliefs more often than chance when asked to explain or describe their initial belief when shown more diverse counterevidence (Experiment 2) or when told that their initial belief was incorrect (Experiment 3). Overall, these data suggest that preschoolers have nascent capacities for explicit belief revision in light of counterevidence.     

Advice-taking as an unobtrusive measure of prejudice

A new unobtrusive measure of prejudice is proposed based on an advice-taking task. The computer-based task requires participants to find a token hidden behind one of two boxes. Prior to making their choice, however, someone (depicted by a name or a face) provides advice as to the token’s location. An unobtrusive measure of prejudice is derived by manipulating the advice-giver’s social group (e.g., male or female, Asian or White) and comparing the proportions of advice taken from each group. In Experiment 1, although the participants were not aware of it, they took more advice from males than from females. In Experiment 2, the relative proportion of advice taken from Asian versus White advice-givers correlated with responses to a news story pertaining to Asians. In Experiment 3, the relative proportion of advice taken from Asian versus White advice-givers correlated with scores on the Implicit Association Test (IAT) and predicted discriminatory behaviour, as indexed by the lost e-mail technique, better than other measures. In Experiment 4, scores on the advice task were uncontaminated by social desirability concerns and reactance and reflected the relative amounts of trust that people placed in different social groups. Taken together, these findings suggest that the advice task may be a useful tool for researchers seeking an unobtrusive measure of prejudice with predictive validity.     

Metacognitive myopia and the overutilization of misleading advice

Previous research on advice taking has explained the failure to exploit collective wisdom in terms of the egocentric underweighting of advice provided by independent others. The present research is concerned with an opposite and more radical source of irrational advice taking, namely, the failure to critically assess the validity of advice due to metacognitive myopia. Participants could use the advice of one or two experts when estimating health risks. They read sketches of the study samples that experts had drawn to estimate conditional probabilities (e.g., of HIV‐given drug addiction). Whether samples were valid or seriously biased, subsequent judgments were strongly affected by any advice (Experiment 1). Uncritical reliance on any advice persisted when participants were sensitized to the contrast of valid and invalid advice in a repeated measures design (Experiment 2), when participants themselves believed advice not to be valid (Experiment 3), and even after full debriefing about invalid advice (Experiment 4). Lay advice exerted a similar influence as expert advice (Experiment 5). Although these provocative results are independent of numeracy and consensus (Experiment 6), they highlight the impact of metacognitive myopia as an impediment of social rationality.     

The relative influence of advice from human experts and statistical methods on forecast adjustments

Decision makers and forecasters often receive advice from different sources including human experts and statistical methods. This research examines, in the context of stock price forecasting, how the apparent source of the advice affects the attention that is paid to it when the mode of delivery of the advice is identical for both sources. In Study 1, two groups of participants were given the same advised point and interval forecasts. One group was told that these were the advice of a human expert and the other that they were generated by a statistical forecasting method. The participants were then asked to adjust forecasts they had previously made in light of this advice. While in both cases the advice led to improved point forecast accuracy and better calibration of the prediction intervals, the advice which apparently emanated from a statistical method was discounted much more severely. In Study 2, participants were provided with advice from two sources. When the participants were told that both sources were either human experts or both were statistical methods, the apparent statistical‐based advice had the same influence on the adjusted estimates as the advice that appeared to come from a human expert. However when the apparent sources of advice were different, much greater attention was paid to the advice that apparently came from a human expert. Theories of advice utilization are used to identify why the advice of a human expert is likely to be preferred to advice from a statistical method. Copyright © 2009 John Wiley & Sons, Ltd.     

Repairing inappropriately specified utterances: Revision or restart?

In two experiments, we investigated repair of inappropriately specified utterances (e.g.,blue square instead ofdark blue square) to determine whether speakers can simply revise a speech plan or must begin anew. In Experiment 1, speakers produced a prime utterance followed by a target utterance that differed from the prime in only one word, but in Experiment 2, they only planned the prime but produced the target. If speakers must repair by restarting, both situations would involve planning from scratch, with a possible benefit of residual activation. If they can repair by revising, though, only the first situation would involve planning from scratch, and the second situation would involve revision of a plan. The targets had either one word more (addition) or fewer (deletion) than the prime sentences. The restart hypothesis predicted that any cost of addition over deletion should be similar in the two experiments. In contrast, the revision hypothesis predicted an extra cost of addition in Experiment 2, because addition involves retrieval of an extra word. In support of the revision hypothesis, there was no difference between additions and deletions in Experiment 1, but in Experiment 2 additions took longer than deletions. We conclude that speakers can repair utterances by revising a speech plan.     

Being responsible versus acting responsibly: Effects of agency and risk taking on responsibility judgments

In three experimental studies, with managers and students as participants, we explore in this paper the relation between two kinds of responsibility judgments, called Responsibility 1 (R1) and Responsibility 2 (R2). Decision makers can be viewed as being more or less responsible for their choice and its consequences (R1). Their actions can also be evaluated, from a normative point of view, as instances of more or less responsible behavior (R2). Experiment 1 showed that managers who depart from the default or “normal” course of action, by choosing a new (versus familiar) alternative, changing (versus sticking to) an initial decision, or going against (versus following) the advice of a management team, are rated as more responsible (R1) for the outcomes of their decision. At the same time, they are perceived to act in a less responsible way (R2). Experiment 2 compared decision makers choosing between more or less risky options. High risk takers were held more responsible (R1) for their choice and for its consequences, but were again viewed as behaving in a less responsible way (R2) than low risk takers. In Experiment 3, participants judged decision makers who followed or opposed others' advice by choosing either a high or a low risk option. Opposing others' advice led to higher R1 and lower R2 scores, especially when choosing the high risk option, moderated by outcome (successful decisions appearing more responsible than those that went wrong). Thus R1 and R2 judgments should be distinguished as having different and sometimes even opposite determinants.     

Why is p = .90 better than p = .70? Preference for definitive predictions by lay consumers of probability judgements

What do people regard as an informative and valuable probability statement? This article reports four experiments that show participants to have a clear preference for more extreme and higher probabilities over less extreme and lower ones. This pattern emerged in Experiment 1, in which no context was provided, and was further explored in Experiment 2 within a positive and a negative context. The findings were further confirmed in Experiment 3, which employed a Bayesian framework with revisions of opinions. Finally, Experiment 4 showed how preference for high probabilities can lead people to prefer an overconfident to a more well-calibrated (accurate) forecaster. The results are interpreted as manifestations of a search for definitive predictions principle, which asserts that high probabilities are preferred to medium ones and often favored over the corresponding complementary low probabilities on the basis of their capacity to predict the occurrence of single outcomes.     

The need to explain

How do reasoners deal with inconsistencies? James (1907) believed that the rational solution is to revise your beliefs and to do so in a minimal way. We propose an alternative: You explain the origins of an inconsistency, which has the side effect of a revision to your beliefs. This hypothesis predicts that individuals should spontaneously create explanations of inconsistencies rather than refute one of the assertions and that they should rate explanations as more probable than refutations. A pilot study showed that participants spontaneously explain inconsistencies when they are asked what follows from inconsistent premises. In three subsequent experiments, participants were asked to compare explanations of inconsistencies against minimal refutations of the inconsistent premises. In Experiment 1, participants chose which conclusion was most probable; in Experiment 2 they rank ordered the conclusions based on their probability; and in Experiment 3 they estimated the mean probability of the conclusions' occurrence. In all three studies, participants rated explanations as more probable than refutations. The results imply that individuals create explanations to resolve an inconsistency and that these explanations lead to changes in belief. Changes in belief are therefore of secondary importance to the primary goal of explanation.     

Combining advice: the weight of a dissenting opinion in the consensus

We present two studies that evaluate how people combine advice and how they respond to outlying opinions. In a preliminary study, we found that individuals use discounting strategies when they encounter an extreme opinion in a small sample of opinions taken only once (a one‐shot advice‐taking situation). The main study examines the influence of outlying opinions (which may or may not be accurate) within a learning paradigm with feedback. This study shows that it is easy to reinforce a discounting strategy (with feedback) whereas it is more difficult to counteract this default strategy. In the discussion we consider cognitive, statistical, and strategic justifications for discounting opinions, from both theoretical and practical points of view. Copyright © 2004 John Wiley & Sons, Ltd.     

The need to explain

How do reasoners deal with inconsistencies? James (1907) believed that the rational solution is to revise your beliefs and to do so in a minimal way. We propose an alternative: You explain the origins of an inconsistency, which has the side effect of a revision to your beliefs. This hypothesis predicts that individuals should spontaneously create explanations of inconsistencies rather than refute one of the assertions and that they should rate explanations as more probable than refutations. A pilot study showed that participants spontaneously explain inconsistencies when they are asked what follows from inconsistent premises. In three subsequent experiments, participants were asked to compare explanations of inconsistencies against minimal refutations of the inconsistent premises. In Experiment 1, participants chose which conclusion was most probable; in Experiment 2 they rank ordered the conclusions based on their probability; and in Experiment 3 they estimated the mean probability of the conclusions' occurrence. In all three studies, participants rated explanations as more probable than refutations. The results imply that individuals create explanations to resolve an inconsistency and that these explanations lead to changes in belief. Changes in belief are therefore of secondary importance to the primary goal of explanation.     

When guessing what another person would say is better than giving your own opinion: Using perspective-taking to improve advice-taking

We investigated how perspective-taking might be used to overcome bias and improve advice-based judgments. Decision makers often tend to underweight the opinions of others relative to their own, and thus fail to exploit the wisdom of others. We tested the idea that decision makers taking the perspective of another person engage a less egocentric mode of processing of advisory opinions and thereby improve their accuracy. In Studies 1–2, participants gave their initial opinions and then considered a sample of advisory opinions in two conditions. In one condition (self-perspective), they were asked to give their best advice-based estimates. In the second (other-perspective), they were asked to give advice-based estimates from the perspective of another judge. The dependent variables were the participants' accuracy and indices that traced their judgment policy. In the self-perspective condition participants adhered to their initial opinions, whereas in the other-perspective condition they were far less egocentric, weighted the available opinions more equally and produced more accurate estimates. In Study 3, initial estimates were not elicited, yet the data patterns were consistent with these conclusions. All the studies suggest that switching perspectives allows decision makers to generate advice-based judgments that are superior to those they would otherwise have produced. We discuss the merits of perspective-taking as a procedure for correcting bias, suggesting that it is theoretically justifiable, practicable, and effective.     

Reversing roles: a cognitive strategy for undoing memory deficits associated with token status

Tested whether having tokens (Ts) adopt the role of judge reduces cognitive deficits; examined several hypotheses to explain these deficits. In 3 experiments, Ss were asked to remember as many as possible of opinions exchanged in a group interaction with 3 actors. Experiment 1 demonstrated that judging majority members helped gender Ts improve their memory and ruled out self-denigration as a mediator of token deficits. Experiment 2 indicated that judging others was effective regardless of whether the others were said to know about it or not, ruling out insulation from evaluative scrutiny as a viable mediator for the judge role. Experiment 3 suggested the judge role restores completely the Ts, cognitive capacities and ruled out heightened responsibility as an explanation for the improved memory of judges. This work suggests that Ts may perform better if they can restructure cognitively their social environments.     

Revising what readers know: Updating text representations during narrative comprehension

Reading comprehension involves not just encoding information into memory, but also updating and revising what is already known or believed. For example, as narrative plots unfold, readers often must revise the expectations they have constructed from earlier portions of text to successfully comprehend later events. Evidence suggests that such revision is by no means guaranteed. In three experiments, we examined conditions that influence readers' revision of trait-based models for story characters. Trait models are particularly relevant for examining such revision because they demonstrate resistance to change. We specifically assessed whether task instructions and content-driven refutations of earlier information would enhance the likelihood of revision. In Experiment 1, instructions to carefully consider the appropriateness of story outcomes generally facilitated revision. In Experiment 2, we removed those instructions; revision occurred only when refutations included sufficient explanation to suggest that updating was necessary. Experiment 3 further supported the influence of instructions on readers' propensities to revise. These results are informative with respect to the mechanisms that guide readers' moment-by-moment comprehension of unfolding narratives.     

Estimating national populations: cross‐cultural differences and availability effects

Estimates of national population were studied in two experiments. In Experiment 1, Canadian and Chinese undergraduates rated their knowledge of 112 countries and then estimated the population of each. In Experiment 2, Canadians rated their knowledge of 52 countries and then provided population estimates for these primed countries and for a comparable set of 52 unprimed countries. In Experiment 1, participants from both nations produced estimates that resembled those obtained from Americans in prior studies (Brown and Siegler, 1992 , 1993 , 1996 , 2001 ). However, there were several reliable cross‐national differences in performance which appear to reflect cross‐cultural differences in task‐relevant naive domain knowledge. In addition, both experiments produced findings consistent with the claim that availability‐based intuitions play an important role in this task. In Experiment 1, cross‐national differences in rated knowledge predicted cross‐national differences in estimated population; in Experiment 2, primed country names elicited larger population estimates than unprimed country names. We conclude by arguing for the general utility of this hybrid approach to real‐world estimation. Copyright © 2002 John Wiley & Sons, Ltd.     

Children's differentiation between beliefs about matters of fact and matters of opinion

Two experiments investigated children's implicit and explicit differentiation between beliefs about matters of fact and matters of opinion. In Experiment 1, 8- to 9-year-olds' (n = 88) explicit understanding of the subjectivity of opinions was found to be limited, but their conformity to others' judgments on a matter of opinion was considerably lower than their conformity to others' views regarding an ambiguous fact. In Experiment 2, children aged 6, 8, or 10 years (n = 81) were asked to make judgments either about ambiguous matters of fact or about matters of opinion and then heard an opposing judgment from an expert. All age groups conformed to the opposing judgments on factual matters more than they did to the experts' views on matters of opinion. However, only the oldest children explicitly recognized that opinions are subjective and cannot be "wrong." Implications of these results for models of children's reasoning about epistemic states are discussed.     

Estimating the frequency of everyday events

In two experiments, subjects recorded the frequency of occurrence of 12 classes of events each week for 3 months. During a final test they estimated frequency of occurrence of events either under time restrictions (Experiment 1) or difference priming instructions (Experiment 2). They also made (metamemory) estimates of the accuracy of their estimates. Time restrictions during an initial estimate did not affect the accuracy of frequency or metamemory estimation but a second estimate did increase accuracy. Priming instructions affected accuracy of metamemory estimates as well as the accuracy of estimates for high-frequency events. Metamemory error increased with event frequency.