A Reverse Outcome Bias: The Influence of Multiple Reference Points on the Evaluation of Outcomes and Decisions

Two experiments examined the influence of multiple reference points on the evaluation of outcomes and decisions that lead to those outcomes. Norm theory is applied as a conceptual framework for understanding the conditions under which alternative norms may be evoked by the decision context and how they are subsequently used as reference points in the evaluation process. Of primary interest, in these studies, was how an outcome is evaluated when two reference points, the status quo and an evoked alternative, provide conflicting information about the "goodness" of the outcome (the outcome is good from the perspective of one reference point and bad from the perspective of the other). A gambling paradigm, based on regret theory, is employed to address these questions. We find that an alternative outcome is more likely to be evoked as a reference point when: (1) it is certain that another choice would have led to the alternative outcome; (2) a social comparison other receives the alternative outcome; and (3) the alternative outcome is in a different evaluative domain than the outcome received (i.e., is negative when the outcome received is positive). When these conditions hold, and the alternative outcome is used as a reference point for evaluation, the evaluations which result are quite counterintuitive: winners are rated as more regretful over their choices than losers are considered to be less satisfied with their outcomes than losers, and are rated as having made poorer quality decision than losers, who made the same choice! The latter finding represents a complete reversal of the outcome bias often observed in judgments of decisions made under uncertainty.     

Collective decision making reduces metacognitive control and increases error rates,particularly for overconfident individuals

This research aimed to investigate the changes in judgment accuracy, confidence, control thresholds, and decision outcomes when people act in two-person groups (dyads) compared with acting individually. First, we used interacting dyads to determine the metacognitive and behavioral outcomes of collective decision making and compared them with those of individuals. Second, we examined whether these changes were related to the trait-confidence and bias of individuals working together. Using a within-person design, undergraduate psychology students (N = 116) completed a General-knowledge Test individually, then together as a dyad. Each question was accompanied by a confidence rating and a decision to bet $10 on the answer. Dyads had significantly higher confidence and lower control thresholds than individuals. They were also significantly more decisive (made more bets) and reckless (lost a higher rate of bets) than when working alone. Thus, we observed a higher rate of decision errors for groups than individuals. The results also demonstrated the important role of individual differences: Overconfident individuals became even more confident, decisive, and reckless when working together compared with less confident or underconfident individuals working together. These findings have important theoretical and applied implications for collective decision making; metacognitive bias and potentially control thresholds may be targeted to alleviate the larger error rates and guide the formation of more effective groups.     

Target prototypicality moderates racial bias in the decision to shoot

Research shows that target race can influence the decision to shoot armed and unarmed Black and White males (e.g., Correll, Park, Judd, & Wittenbrink, 2002). To date, however, research has only examined category level effects by comparing average responses to Blacks and Whites. The current studies investigated whether target prototypicality influences the decision to shoot above and beyond the effect of race. Here, we replicated racial bias in shoot decisions and demonstrated that bias was moderated by target prototypicality. As target prototypicality increased, participants showed greater racial bias. Further, when targets were unprototypic, racial bias reversed (e.g., participants mistakenly shot more unarmed Whites than Blacks). Study 2 examined whether these effects were observed among police officers. Although police showed no racial bias on average, target prototypicality significantly influenced judgments. Across both studies, sensitivity to variability in Whites' prototypicality drove these effects, while variation in Black prototypicality did not affect participants' decisions.     

Psychological determinants of decision attitude

Decision attitude — an analog of risk attitude — is the propensity to make (or avoid making) a decision: in decision aversion, a person finds it more desirable to receive through fiat the better of two options than to have a choice between them; in decision seeking, the choice is more desirable, even though it can lead to nothing better than the best option. Both decision aversion and decision seeking were found in hypothetical scenarios. Experimental manipulations and subjects' justifications point to anticipated regret, fear of blame for poor outcomes, and desire for equitable distributions as sources of decision aversion. One source of decision seeking (for self) and decision aversion (when deciding for others) appears to be the desire for the self-determination of the affected parties. We consider the implications of our results for personal choice and public policy decisions.     

The Effects of Decision Outcome Dispersion Upon Organizational Decision Making

The effects of varying decision outcome dispersion on organizational decision making were investigated under individual and group decision making conditions. Thirty-six female and pg]36 male subjects made decisions for organizational decision scenarios in which outcomes affected primarily the decision maker, people other than the decision maker, or a group of which the decision maker was a member. Subjects rated their levels of perceived risk and confidence in their decisions and made decisions within a simulated context of either a small or a large organization. Results indicated that subjects perceived significantly less risk and more confidence in their decisions when outcomes affected primarily themselves rather than others regardless of whether the decisions were made individually or by a group. Males perceived their decisions as significantly more risky than females. Induced organizational size did not significantly influence decision making.

     

"I knew we would win": hindsight bias for favorable and unfavorable team decision outcomes

This study examined hindsight bias for team decisions in a competitive setting in which groups attempted to outperform each other. It was anticipated that, because of self-serving mechanisms, individuals would show hindsight bias only when decision outcomes allowed them to take credit for their own team's success or to downgrade another team for being unsuccessful. MBA students playing a market simulation game made hindsight estimates regarding the likelihood that either their own or another team would perform well. Consistent with a self-serving interpretation, when decision outcomes were favorable individuals evaluating their own team, but not those evaluating another, showed hindsight bias. When outcomes were unfavorable individuals evaluating their own team did not show hindsight bias, but those evaluating another team did. Discussion focuses on implications of hindsight bias in team decision-making settings.     

A Comparison of Hindsight Bias in Groups and Individuals: The Moderating Role of Plausibility

We compared the magnitude of the hindsight bias in individuals and groups with the prediction that the plausibility of an outcome would affect the magnitude of the group–individual difference. We provided groups and individuals with outcomes of scientific studies, and asked them to predict the probability of those outcomes as if they did not know the given outcomes and to report their level of surprise at the outcomes. Overall, groups were more prone to hindsight bias than were individuals, but the group–individual difference was present only when the given outcomes were relatively implausible (Study 1). Moreover, this difference was not eliminated even when participants were asked to consider alternative outcomes (Study 2). Implications are discussed.     

Good or Bad,We Want it Now: Fixed‐cost Present Bias for Gains and Losses Explains Magnitude Asymmetries in Intertemporal Choice

Intertemporal tradeoffs are ubiquitous in decision making, yet preferences for current versus future losses are rarely explored in empirical research. Whereas rational‐economic theory posits that neither outcome sign (gains vs. losses) nor outcome magnitude (small vs. large) should affect delay discount rates, both do, and moreover, they interact: in three studies, we show that whereas large gains are discounted less than small gains, large losses are discounted more than small losses. This interaction can be understood through a reconceptualization of fixed‐cost present bias, which has traditionally described a psychological preference for immediate rewards. First, our results establish present bias for losses—a psychological preference to have losses over with now. Present bias thus predicts increased discounting of future gains but decreased (or even negative) discounting of future losses. Second, because present bias preferences do not scale with the magnitude of possible gains or losses, they play a larger role, relative to other motivations for discounting, for small magnitude intertemporal decisions than for large magnitude intertemporal decisions. Present bias thus predicts less discounting of large gains than small gains but more discounting of large losses than small losses. The present research is the first to demonstrate that the effect of outcome magnitude on discount rates may be opposite for gains and losses and also the first to offer a theory (an extension of present bias) and process data to explain this interaction. The results suggest that policy efforts to encourage future‐oriented choices should frame outcomes as large gains or small losses. Copyright © 2012 John Wiley & Sons, Ltd.     

Information sampling and group decision making: the effects of an advocacy decision procedure and task experience

Group discussions tend to focus on information that was previously known by all members (shared information) rather than information known by only 1 member (unshared information). If the shared information implies a suboptimal alternative, this sampling bias is associated with inaccurate group decisions. The present study examines the impact of 2 factors on information exchange and decision quality: (a) an advocacy group decision procedure versus unstructured discussion and (b) task experience. Results show that advocacy groups discussed both more shared and unshared information than free-discussion groups. Further, with increasing experience, more unshared information was mentioned in advocacy groups. In contrast, there was no such increase in unstructured discussions. Yet advocacy groups did not significantly improve their decision quality with experience.     

The Impact of Depression on Self–Other Discrepancies in Decision Making

Although there is a small but growing body of literature on how people make risky decisions for others and predict others' decisions, results seem to be contradictory. The authors contribute to the understanding of these mixed results by investigating how depression affects self–other discrepancies in decision making and the psychological processes that underlie these discrepancies. In an experiment, depressed and nondepressed individuals read a series of scenarios involving decisions about health, money, and interpersonal relationships. They then indicated which of two options they would choose for themselves or for another person, or predicted which option this person would choose for himself or herself. Finally, participants reported benefits and drawbacks of the decisions (i.e., cognitions) and feelings about risk. Depressed individuals were less prone to bias when they predicted others' decisions than nondepressed individuals. Feelings about risk played a key role in determining the direction and the magnitude of this bias. In contrast, both depressed and nondepressed individuals showed bias when they made decisions for others. This bias affected their decisions in opposing ways and was determined by cognitions. This bias is consistent with literature showing that depression is associated with an increased sensitivity to social risks. The authors provide a theoretical explanation of self–other discrepancies in decision making in depressed and nondepressed individuals and conclude that the results support the assumption that depression is associated with psychological processes whose role is to increase sensitivity to social threats rather than with a more general negative bias in cognitive functioning. Copyright © 2014 John Wiley & Sons, Ltd.     

Attributions of responsibility and affective reactions to decision outcomes

Immediate affective reactions to outcomes are more intense following decisions to act than following decisions not to act. This finding holds for both positive and negative outcomes. We relate this "actor-effect" to attribution theory and argue that decision makers are seen as more responsible for outcomes when these are the result of a decision to act as compared to a decision not to act. Experiment 1 (N = 80) tests the main assumption underlying our reasoning and shows that affective reactions to decision outcomes are indeed more intense when the decision maker is seen as more responsible. Experiment 2 (N = 40) tests whether the actor effect can be predicted on the basis of differential attributions following action and inaction. Participants read vignettes in which active and passive actors obtained a positive or negative outcome. Action resulted in more intense affect than inaction, and positive outcomes resulted in more intense affect than negative outcomes. Experiment 2 further shows that responsibility attributions and affective reactions to outcomes are highly correlated; that is, more extreme affective reactions are associated with more internal attributions. We discuss the implications for research on post-decisional reactions.     

The influence of test scores and naturally-occurring pupil characteristics on psychoeducational decision making with children

A computer simulation of psychoeducational decision making was used to study the extent to which the assessment and decision-making process differs for different kinds of students, the extent to which naturally-occurring pupil characteristics (appearance, sex) influence diagnostic outcomes, and the extent to which decision makers perceive different assessment information and pupil characteristics as influencing their decisions. The decision-making process did not differ as a function of differences in referral information. While SES, sex and physical appearance did not affect outcome decisions, the nature of the reason for referral did. Scores on achievement tests, intelligence tests, and the disparity between the two were rated as having the greatest influence on the eligibility, classification, and prognostic decisions that were made. Decision makers said they were not influenced by naturally-occurring pupil characteristics.     

Reducing exposure to trust-related risks to avoid self-blame

Three studies demonstrated that anticipated self-blame elicits more conservative decisions about risks that require trust than about otherwise economically identical risks that do not. Participants were more reluctant to invest money in a company when it risked failure due to fraud versus low consumer demand (Study 1), and to risk points in an economic game when its outcome ostensibly depended on another participant versus chance (Studies 2 and 3). These effects were mediated by anticipated self-blame (Studies 1 and 2). Additionally, participants who actually experienced a loss felt more self-blame when the loss violated their trust and became even more conservative in subsequent risk decisions relative to participants whose loss did not violate their trust (Study 3). No support emerged for alternative explanations based on either the perceived probability of incurring a loss or an aversion to losses that profit others. The motivational power of trust violations is discussed.     

On avoiding framing effects in experienced decision makers

The present study aimed to (a) demonstrate the effect of positive–negative framing on experienced criminal justice decision makers, (b) examine the debiasing effect of visually structured risk messages, and (c) investigate whether risk perceptions mediate the debiasing effect of visual aids on decision making. In two phases, 60 senior police officers estimated the accuracy of a counterterrorism technique in identifying whether a known terror suspect poses an imminent danger and decided whether they would recommend the technique to policy makers. Officers also rated their confidence in this recommendation. When information about the effectiveness of the counterterrorism technique was presented in a numerical format, officers' perceptions of accuracy and recommendation decisions were susceptible to the framing effect: The technique was perceived to be more accurate and was more likely to be recommended when its effectiveness was presented in a positive than in a negative frame. However, when the information was represented visually using icon arrays, there were no such framing effects. Finally, perceptions of accuracy mediated the debiasing effect of visual aids on recommendation decisions. We offer potential explanations for the debiasing effect of visual aids and implications for communicating risk to experienced, professional decision makers.     

Better safe than sorry: Precautionary reasoning and implied dominance in risky decisions

In four studies, student and nonstudent participants evaluated the possible outcomes of binary decisions involving health, safety, and environmental risks (e.g., whether to issue a dam‐failure evacuation order). Many participants indicated that false positives (e.g., evacuation, but no dam failure) were better than true negatives (e.g., no evacuation and no dam failure), thereby implying that the more protective action dominated the less protective action. A common rationale for this response pattern was the precautionary maxim “better safe than sorry.” Participants apparently evaluated outcomes partly on the basis of the decisions that might lead to them, in conflict with consequentialist decision models. Consistent with this explanation, the prevalence of implied dominance decreased substantially when the emphasis on decisions was reduced. These results demonstrate that an initial preference for a decision alternative can alter the evaluation of possible consequences of both the preferred alternative and a competing alternative, suggesting positive feedback loops that reinforce the initial preference. The rationality of considering the decision itself as an attribute of possible outcomes is discussed. Copyright © 2009 John Wiley & Sons, Ltd.     

Understanding and predicting parental decisions about early childhood immunizations.

This research investigated the factors that influence decisions about immunizations. Women in the third trimester of pregnancy (N=195) rated their likelihood of immunizing their child; stated their reasons for and against immunizing; and rated their perceptions of the benefits and risks of immunization, feelings of responsibility, and anticipated regret if harm occurred. Immunization status was determined at follow-up. Stepwise regression analyses demonstrated that immunization decisions are strongly influenced by omission bias factors such as anticipated responsibility and regret variance (which explained more than 50% of variance). It is suggested that parents may benefit from antenatal decision aids that address omission bias and encourage them to assess benefits and risks of immunizations on the basis of scientific evidence.     

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.     

Information about expert decision and post‐decision distortion of facts of own decision

Cognitive representations of decision problems are dynamic. During and after a decision, evaluations and representations of facts change to support the decision made by a decision maker her‐ or himself (Svenson, 2003). We investigated post‐decision distortion of facts (consolidation). Participants were given vignettes with facts about two terminally ill patients, only one of whom could be given lifesaving surgery. In Study 1, contrary to the prediction, the results showed that facts were distorted after a decision both by participants who were responsible for the decisions themselves and when doctors had made the decision. In Study 2 we investigated the influence of knowledge about expert decisions on a participant's own decision and post‐decisional distortion of facts. Facts were significantly more distorted when the participant's decision agreed with an expert's decision than when the participant and expert decisions disagreed. The findings imply that knowledge about experts' decisions can distort memories of facts and therefore may obstruct rational analyses of earlier decisions. This is particularly important when a decision made by a person, who is assumed to be an expert, makes a decision that is biased or wrong.     

Criticisms of the criminal justice system: A decision making analysis

When a decision making analysis is applied to key decisions within the criminal justice system, e.g., bail, sentencing, and plea bargaining, a wide range of evidence suggests that the decision makers believe they follow policies other than those that actually guide their decisions; that the policies that are followed are often simple ones, involving only a few decision factors; and that the decision outcomes are often assigned to defendants in a reasonable manner but that, even so, the outcomes are often ineffective. Because many proposals for the reform of the criminal justice system are based on the testimony of decision makers and “experts” whose knowledge of the system is often flawed, it is unlikely that reforms will have a beneficial impact on criminal behavior until much more is known about the day-to-day decisions of judges, prosecutors, and probation officers.