The Effect of Decision Strategy on Deciding to Defer Choice

Recent research has examined consumer decision making when the option of not choosing any of the alternatives is also provided. The findings from this research suggest that the decision to defer choice is sensitive to the uncertainty of choosing the most preferred option from the set of alternatives provided. Building on this research, the author tests whether the decision to defer choice is also influenced by task variables that influence decision uncertainty. In the first experiment, this proposition is tested for choice problems in which information on three relatively equally attractive alternatives is presented either sequentially or simultaneously. As predicted, the preference for the defer-choice option was greater when the three alternatives were presented simultaneously. A second study forced subjects into using one of four decision strategies in order to choose between two non-dominated alternatives. The preference for the no-choice option was found to be higher when the rule required explicit attribute tradeoffs and lower when it simplified choice. These results suggest that choice uncertainty is influenced by the decision strategy used to determine the preference among alternatives. We conclude with a discussion of the implications of the results for marketers' communication strategies.     

Instance‐based Learning: A General Model of Repeated Binary Choice

A common practice in cognitive modeling is to develop new models specific to each particular task. We question this approach and draw on an existing theory, instance‐based learning theory (IBLT), to explain learning behavior in three different choice tasks. The same instance‐based learning model generalizes accurately to choices in a repeated binary choice task, in a probability learning task, and in a repeated binary choice task within a changing environment. We assert that, although the three tasks are different, the source of learning is equivalent and therefore, the cognitive process elicited should be captured by one single model. This evidence supports previous findings that instance‐based learning is a robust learning process that is triggered in a wide range of tasks from the simple repeated choice tasks to the most dynamic decision making tasks. Copyright © 2010 John Wiley & Sons, Ltd.     

Limits to decision-making ability in direct multiattribute alternative evaluation

In recent years there has been considerable interest in how decision strategies in choice problems depend on such characteristics as the number of available criteria and the number of available alternatives. Along with multicriteria choice problems, classification tasks are treated where alternatives are classified into several decision (evaluative) classes. We believe that in classification problems one's ability in information processing is limited and depends on task complexity. In this paper we describe two experiments involving categorization of a large number of multiattribute alternatives into two or four evaluative classes. The results demonstrate that the subjects use different decision strategies and that there is a limit in human ability to implement these two tasks.     

Anticipations of Effort and Accuracy in Multiattribute Choice

Research on multiattribute choice strategies suggests that decision makers adapt to variations in task features by switching decision strategies. One perspective is that strategy selection is determined by a trade-off between the goals of minimizing effort and maximizing accuracy. However, since strategy selection is based on anticipated effort and accuracy, empirical evidence is needed on the nature of these anticipations. An experiment examines how well decision makers anticipate the influence of two particular task features, information display organization and number of alternatives, on effort and accuracy. Subjects chose the best alternative from sets of loan applications described by six relevant attributes. Prior to each choice, they prospectively judged the effort required and the accuracy that would result. Results suggest that anticipated consequences deviate substantially from experienced consequences for both effort and accuracy. Neither task experience nor explicit feedback brought anticipations and experiences closer together. These findings underscore the importance of anticipation judgments in multiattribute choice.     

The Influence of Decision Aids on Choice Strategies: An Experimental Analysis of the Role of Cognitive Effort

This paper examines the role of computer-based decision aids in reducing cognitive effort and therefore influencing strategy selection. It extends and complements the works reported in the behavioral decision theory literature on the role of effort and accuracy in choice tasks. The central proposition of this paper is that specific features can be incorporated within a set of decision aids that will alter the effort required to implement a particular choice strategy relative to other strategies, and that this will influence strategy selection by the decision maker. In a laboratory experiment, using a repeated measures design, 48 subjects performed a preferential choice task using different decision aids. Subjects were given different levels of support to reduce the cognitive effort associated with different preferential choice strategies. In particular, the decision aids provided varying levels of support for the processing associated with either elimination by aspects or additive difference strategies. The study examined how information processing strategies were influenced by the decision aids. The results show that decision aids which reduce the effort associated with the elimination by aspects strategy induce behaviors associated with elimination by aspects. More importantly, there was an interaction effect caused by the distinct behavior of the group which was provided support for additive difference but not for elimination by aspects. This group processed the information about available choices in a way that is consistent with an additive difference strategy. These findings indicate that a decision aid can induce additive processing by altering the relative effort requirements of different choice strategies.     

Choice Environment, Market Complexity, and Consumer Behavior: A Theoretical and Empirical Approach for Incorporating Decision Complexity into Models of Consumer Choice

Most empirical models of choice in economics and consumer research assume that the decision maker assesses all alternatives and information in a perfect information-processing sense. The complexity of the choice environment, the ability of the individual to make complex decisions, and the effect of choice context on the decision strategy are generally not considered in statistical model development. One of the reasons for this omission is that theoretical literature on choice complexity and imperfect ability to choose that has developed in psychology and behavioral decision theory (BDT) literatures has not been translated into empirical econometric analysis. Second, the data used in economics and consumer research studies tend to be somewhat different from the data structures used in psychology and BDT literatures. In this paper we outline a theoretical model that simultaneously considers task complexity, effort applied by the consumer, ability to choose, and choice. We then construct a measure of task complexity and incorporate this in an analysis of a number of data series based on the random utility framework. We also examine the performance of our measure of task complexity in a composite data set that allows for increased variability in factors affecting decision context. Our approach provides a mechanism to link research in BDT and econometric modeling of consumer choice. Our findings suggest that task complexity does affect inferences about choice model parameters and that context effects, such as complexity, have a systematic impact on the parameters of econometric models of choice. The modeling approach provides a mechanism for inclusion of results from psychology and BDT in traditional economic models of consumer choice.     

The Common Ratio Effect in Choice,Pricing, and Happiness Tasks

The Allais common ratio effect is one of the most robust violations of rational decision making under risk. In this paper, we conduct a novel test of the common ratio effect in which we elicit preferences for the common ratio choice alternatives in choice, pricing, and happiness rating tasks. We find large shifts in preference patterns across tasks, both within and between subjects. In particular, we find that both the consistency and distribution of responses differ systematically across tasks, with modal choices replicating the Allais preference pattern, modal happiness ratings exhibiting consistent risk aversion, and modal prices maximizing expected value. We discuss the predictions of various cognitive explanations of the common ratio effect in the context of our experiment. We find that a dual process framework provides the most complete account of our results. Surprisingly, we also find that although the Allais pattern was the modal behavior in the choice task, none of the 158 respondents in our experiment exhibited the Allais pattern simultaneously in choice, happiness, and pricing tasks. Our results constitute a new paradox for the leading theories of choice under risk. Copyright © 2017 John Wiley & Sons, Ltd.     

The Cognitive Processes Underlying Risky Choice

In this article, we tested two concepts of decision making: expected utility theory and heuristic choice. In Experiment 1, we applied think‐aloud protocols to investigate violations of expected utility theory. In Experiments 2 to 4, we introduced a new process‐tracing method—called predict‐aloud protocols—that has advantages over previously suggested research methods. Results show the following: (i) people examine information between rather than within gambles; (ii) the priority heuristic emerges as the most frequently used strategy when problems are difficult; and (iii) people check for similarity when problems are easy. Copyright © 2012 John Wiley & Sons, Ltd.     

Moving Onwards: An Action Continuation Strategy in Finding the Way

In four studies, we examined people's strategies when deciding between multiple routes of equivalent length in way‐finding tasks. The results reveal the important role of continuing behavior when faced with a choice from multiple viable routes. After affirming the existence of asymmetric preferences for alternatives (Studies 1 and 2), we observed that variations of simple known‐environment mazes supported action continuation as prevailing process over alternative strategies such as preference for long initial path segments, paths with a least deviating angle, and a modified hill climbing strategy (Study 3). Moreover, asymmetric preferences disappeared with the absence of initial behavior to inform subsequent decision making (Study 4). Results are discussed within the context of decision making, navigation strategies, and everyday life path finding. Copyright © 2014 John Wiley & Sons, Ltd.     

Down the Garden Path: The Role of Conditional Inference Processes in Self‐Persuasion

In a controlled experiment, information format and prior knowledge of risk‐related decision attributes altered the response to decision conflict produced by negatively correlated attributes (NCA) in choice under uncertainty. When dominated choice alternatives were presented in a format in which the displayed attributes were not negatively correlated, decision makers used a simple choice process based on the displayed information. This allowed them to detect the dominated alternatives, regardless of their prior knowledge. However, when the same alternatives were presented in a format in which the displayed attributes were negatively correlated, the more‐knowledgeable decision makers used a compensatory choice process based on the displayed attributes and, consequently, missed the dominated alternatives. The less‐knowledgeable participants, who were unable to use the displayed attributes because of their lack of expertise, calculated the nondisplayed attributes and detected the dominated alternatives. With NCA, the more‐knowledgeable participants followed a conflict‐resolution strategy using the displayed NCAs, whereas the less‐knowledgeable individuals followed a conflict‐avoidance strategy using the uncorrelated, nondisplayed attributes that inadvertently revealed the dominance structure of the decision. The implications of person factors for the effects of NCA and in other types of decisions with NCA are discussed.     

Maximization and Search for Alternatives in Decision Situations With and Without Loss of Options

Maximizing tendency has been associated with greater accumulation of choice alternatives prior to selection of a preference. It is not known whether this search behavior extends to situations in which accumulation of new choice alternatives comes with the potential loss of existing ones. In Study 1, we replicate the original finding of greater accumulation of choice alternatives, using a computer‐based laboratory task. We then provide evidence, in Studies 2 and 3, that when potential loss of existing options is incorporated into the task, maximization is associated with less rather than more search for additional options. Maximization components of decision difficulty and alternative search, but not high standards or satisficing, explain this behavior. Other task measures are also collected, but few maximization‐related differences are observed. The findings support an interpretation of maximizers as decision makers who are as concerned with the potential loss of existing options as with the loss of undiscovered future ones. Copyright © 2015 John Wiley & Sons, Ltd.     

Step by step: A microgenetic study of the development of strategy choice in infancy

To examine patterns of strategy choice and discovery during problem‐solving of a novel locomotor task, 13.5‐ and 18‐month‐old infants were placed at the top of a staircase and encouraged to descend. Spontaneous stair descent strategy choices were documented step by step and trial by trial to provide a microgenetic account of problem‐solving in action. Younger infants tended to begin each trial walking, were more likely to choose walking with each successive step, and were more likely to lose their balance and have to be rescued by an experimenter. Conversely, older infants tended to begin each trial scooting, were more likely to choose scooting with each successive step, and were more likely to use a handrail to augment balance on stairs. Documenting problem‐solving microgenetically across age groups revealed striking similarities between younger infants' strategy development and older children's behaviour on more traditionally cognitive tasks, including using alternative strategies, mapping prior experiences with strategies to a novel task, and strengthening new strategies. As cognitive resources are taxed during a challenging task, resources available for weighing alternatives or inhibiting a well‐used strategy are reduced. With increased motor experience, infants can more easily consider alternative strategies and maintain those solutions over the course of the trial.     

The relationship between indecisiveness and eye movement patterns in a decision making informational search task

Indecisiveness is a trait‐related general tendency to experience decision difficulties across a variety of situations, leading to decision delay, worry, and regret. Indecisiveness is proposed (Rassin, 2007) to be associated with an increase in desire for information acquisition and reliance on compensatory strategies—as evidenced by alternative‐based information search—during decision making. However existing studies provide conflicting findings. We conducted an information board study of indecisiveness, using eye tracking methodology, to test the hypotheses that the relationship between indecisiveness and choice strategy depends on being in the early stage of the decision making process, and that it depends on being in the presence of an opportunity to delay choice. We found strong evidence for the first hypothesis in that indecisive individuals changed shift behavior from the first to the second half of the task, consistent with a move from greater to lesser compensatory processing, while the shift behavior of decisive individuals suggested lesser compensatory processing over the whole task. Indecisiveness was also related to time spent viewing attributes of the selected course, and to time spent looking away from decision information. These findings resolve past discrepancies, suggest an interesting account of how the decision process unfolds for indecisive versus decisive individuals, and contribute to a better understanding of this tendency. Copyright © 2009 John Wiley & Sons, Ltd.     

Component processes of phased decision strategies

It is often assumed that decision makers apply mixtures of strategies including heuristic processes in complex choice tasks. In support of this assumption the component processes involved in phased strategies were investigated. Expectations for an experimental investigation were generated by simulations within the effort-quality framework. Effort-quality trade-off functions for tasks of different complexity favor compensatory dimension-based strategies for binary choice. For multialternative choice, a combination of initial dimension-based elimination procedures followed by alternative-based final processing would be expected. These expectations were tested in two experiments. While choosing between two, four, or eight alternatives, subjects could successively retrieve parts of the available information. Depending on their menu selection, either all features of one alternative were displayed together (alternative-based retrieval), or all features on one dimension were displayed together (dimension-based retrieval). Vincent averaging was used to analyze the retrieval sequences with respect to their stationarity. While the stationary sequences for binary choice are compatible with single processing strategies, non-stationarity of the sequences obtained for multialternative choice indicates the use of phased strategies. In particular, non-stationarity due to decreasing dimension-based retrievals over time suggests that subjects first applied dimensional elimination and later derived their choices by more thorough, alternative-based processing of the remaining alternatives.     

Familiarity-Matching: An Ecologically Rational Heuristic for the Relationships-Comparison Task

Previous studies have shown that people often use heuristics in making inferences and that subjective memory experiences, such as recognition or familiarity of objects, can be valid cues for inferences. So far, many researchers have used the binary choice task in which two objects are presented as alternatives (e.g., “Which city has the larger population, city A or city B?”). However, objects can be presented not only as alternatives but also in a question (e.g., “Which country is city X in, country A or country B?”). In such a situation, people can make inferences based on the relationship between the object in the question and each object given as an alternative. In the present study, we call this type of task a “relationships-comparison task.” We modeled the three inference strategies that people could apply to solve it (familiarity-matching [FM; a new heuristic we propose in this study], familiarity heuristic [FH], and knowledge-based inference [KI]) to examine people's inference processes. Through Studies 1, 2, and 3, we found that (a) people tended to rely on heuristics, and that FM (inferences based on similarity in familiarity between objects) well explained participants' inference patterns; (b) FM could work as an ecologically rational strategy for the relationships–comparison task since it could effectively reflect environmental structures, and that the use of FM could be highly replicable and robust; and (c) people could sometimes use a decision strategy like FM, even in their daily lives (consumer behaviors). The nature of the relationships–comparison task and human cognitive processes is discussed.     

Preference‐based Learning of Ideal Solutions in TOPSIS‐like Decision Models

Combining established modelling techniques from multiple‐criteria decision aiding with recent algorithmic advances in the emerging field of preference learning, we propose a new method that can be seen as an adaptive version of TOPSIS, the technique for order preference by similarity to ideal solution decision model (or at least a simplified variant of this model). On the basis of exemplary preference information in the form of pairwise comparisons between alternatives, our method seeks to induce an ‘ideal solution’ that, in conjunction with a weight factor for each criterion, represents the preferences of the decision maker. To this end, we resort to probabilistic models of discrete choice and make use of maximum likelihood inference. First experimental results on suitable preference data suggest that our approach is not only intuitively appealing and interesting from an interpretation point of view but also competitive to state‐of‐the‐art preference learning methods in terms of prediction accuracy. Copyright © 2014 John Wiley & Sons, Ltd.     

Take The First: Option-generation and resulting choices

Experimental decision-making research often uses a task in which participants are presented with alternatives from which they must choose. Although tasks of this type may be useful in determining measures (e.g., preference) related to explicitly stated alternatives, they neglect an important aspect of many real-world decision-making environments—namely, the option-generation process. The goal of the present research is to extend previous literature that fills this void by presenting a model that attempts to describe the link between the use of different strategies and the subsequent option-generation process, as well as the resulting choice characteristics. Specifically, we examine the relationship between strategy use, number and order of generated options, choice quality, and dynamic inconsistency. “Take The First” is presented as a heuristic that operates in ill-defined tasks, based on our model assumptions. An experiment involving a realistic (sports) situation was conducted on suitable participants (athletes) to test the predictions of the model. Initial results support the model’s key predictions: strategies producing fewer generated options result in better and more consistent decisions.     

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.     

Children’s choice strategies: the effects of age and task demands

Two experiments examined the effect of age and cognitive demands on children’s choice strategies. Children aged 8–9 and 12–13 years were asked to choose among either two or four products that differed in several attributes of varying importance to them. Choice tasks were designed to differentiate between the lexicographic and the equal-weighting strategies that the children used. The results showed that older children use the two strategies more appropriately than younger children do. The choice of strategies reflects the demands of the task. All children were more likely to use the strategies correctly when choosing between two alternatives and tended to rely on the relatively less cognitive-demanding lexicographic strategy to choose among four alternatives. However, they were less likely to employ the lexicographic strategy in simpler tasks and when its use was difficult to justify, indicating an adaptive use.