The dynamics of deferred decision

Decision makers are often unable to choose between the options that they are offered. In these settings they typically defer their decision, that is, delay the decision to a later point in time or avoid the decision altogether. In this paper, we outline eight behavioral findings regarding the causes and consequences of choice deferral that cognitive theories of decision making should be able to capture. We show that these findings can be accounted for by a deferral-based time limit applied to existing sequential sampling models of preferential choice. Our approach to modeling deferral as a time limit in a sequential sampling model also makes a number of novel predictions regarding the interactions between choice probabilities, deferral probabilities, and decision times, and we confirm these predictions in an experiment. Choice deferral is a key feature of everyday decision making, and our paper illustrates how established theoretical approaches can be used to understand the cognitive underpinnings of this important behavioral phenomenon.     

On the shape of the probability weighting function

Empirical studies have shown that decision makers do not usually treat probabilities linearly. Instead, people tend to overweight small probabilities and underweight large probabilities. One way to model such distortions in decision making under risk is through a probability weighting function. We present a nonparametric estimation procedure for assessing the probability weighting function and value function at the level of the individual subject. The evidence in the domain of gains supports a two-parameter weighting function, where each parameter is given a psychological interpretation: one parameter measures how the decision maker discriminates probabilities, and the other parameter measures how attractive the decision maker views gambling. These findings are consistent with a growing body of empirical and theoretical work attempting to establish a psychological rationale for the probability weighting function.     

Rational learning and information sampling: on the "naivety" assumption in sampling explanations of judgment biases

Recent research has argued that several well-known judgment biases may be due to biases in the available information sample rather than to biased information processing. Most of these sample-based explanations assume that decision makers are "naive": They are not aware of the biases in the available information sample and do not correct for them. Here, we show that this "naivety" assumption is not necessary. Systematically biased judgments can emerge even when decision makers process available information perfectly and are also aware of how the information sample has been generated. Specifically, we develop a rational analysis of Denrell's (2005) experience sampling model, and we prove that when information search is interested rather than disinterested, even rational information sampling and processing can give rise to systematic patterns of errors in judgments. Our results illustrate that a tendency to favor alternatives for which outcome information is more accessible can be consistent with rational behavior. The model offers a rational explanation for behaviors that had previously been attributed to cognitive and motivational biases, such as the in-group bias or the tendency to prefer popular alternatives.     

Comparison of the distortion of probability information in decision under risk and an equivalent visual task

Decision makers typically overweight small probabilities and underweight large probabilities. However, there are recent reports that when probability is presented in the form of relative frequencies, this typical pattern reverses. We tested this hypothesis by comparing decision making in two tasks: In one task, probability was stated numerically, and in the other task, it was conveyed through a visual representation. In the visual task, participants chose whether a "stochastic bullet" should be fired at either a large target for a small reward or a small target for a large reward. Participants' knowledge of probability in the visual task was the result of extensive practice firing bullets at targets. In the classical numerical task, participants chose between pairs of lotteries with probabilities and rewards matched to the probabilities and rewards in the visual task. We found that participants' probability-weighting functions were significantly different in the two tasks, but the pattern for the visual task was the typical, not the reversed, pattern.     

Eyes on the Prize? Evidence of Diminishing Attention to Experienced and Foregone Outcomes in Repeated Experiential Choice

Recently, there has been increased interest in decisions‐from‐experience (where decision makers learn from observing the outcomes of previous choices), which provide valuable insights into the learning and preference construction processes underlying many daily decisions. Several process models have been developed to capture these processes, and while such models often fit the data well, many assume that the decision maker is a vigilant observer, processing each outcome. In two studies, we provide a critical test of this assumption using eye tracking to record directed visual attention when participants choose repeatedly among two options, each time being shown the outcome for their chosen option and for the foregone option. Consistently, we find that the vigilance assumption is not supported, with decision makers often not attending to outcome information. Moreover, (in)attention to outcomes is predictable, with vigilance decreasing as more choices are made, and being greater for obtained than for foregone outcomes, and when options deliver only gains as opposed to losses or a mixture of gains and losses. Furthermore, we find that this variation in attentional allocation plays a central role in the apparent indecisiveness (inconsistency) in choice, with increased attention to foregone outcomes predicting switches to that option on the next choice. Together, these findings highlight the value of eye tracking in investigations of decisions‐from‐experience, providing novel insight into the cognitive processes underlying them. Copyright © 2015 John Wiley & Sons, Ltd.     

Contingent Weighting in Self-Other Decision Making

Three studies are presented that examine the decision-making processes that lead advisors to have preferences distinct from personal decision makers (Kray & Gonzalez, 1999). Advising and personal decision making were hypothesized to invoke different interpersonal frames, which lead to different weighting of decision attributes. Alternatively, advisors might simply exert less effort in decision making for others than do personal decision makers. In Study 1, the contingent weighting of attributes was examined in two decision-making tasks (choice vs. matching). Advisors were more likely to choose in a manner consistent with "what most people would prefer" than personal decision makers, but no differences in preferences were observed in the matching task. Advisors subsequently reported experiencing less regret and blame and more strongly preferred the chosen alternative than did personal decision makers. In Study 2, advisors considered more decision attributes to be important in the abstract compared to personal decision makers, and the choice pattern of Study 1 was replicated. In Study 3, advisors and personal decision makers generated more considerations when making a decision compared to individuals making decisions in the abstract. Finally, the preferences of personal decision makers were more consistent with their reported attribute importance judgments than were those of advisors. In total, the results suggest advisors incorrectly infer others' preferences, rather than suffer from a deficit of motivation, when giving advice. Copyright 2000 Academic Press.     

A cognitive‐emotional account of the shape of the probability weighting function

Research has shown a tendency of decision makers to overweight small probabilities and to underweight moderate and large probabilities. In standard treatments this is graphically modeled by an inverse S‐shaped probability weighting function. We suggest that emotions play a significant role in the shaping of the probability weighting function. In particular, the weighting function is proposed to be some function of objective probability, expected elation, and expected disappointment. The overweighting of small probabilities results from the anticipated elation after having won, given that winning was very unlikely. The underweighting of large probabilities results from anticipated disappointment after having failed to win, given that winning was very likely. Hence, probability is assumed to influence utility. Three experiments investigate these hypotheses. Experiments 1 and 2 show that a convex function relates probability to surprise. Experiment 3 elicits choice data and further supports the proposed hypotheses. The model adds to the understanding of the cognitive and emotional processes underlying the shape of the probability weighting function. Copyright © 2002 John Wiley & Sons, Ltd.     

“Either a medal or a corporal”: The effects of success and failure on the evaluation of decision making and decision makers

This paper is concerned with judgment by outcomes—justifying decisions and rewarding decision makers in case of success, and condemning both in case of failure. Officers in the Israel Defense Forces evaluated four versions of the same case of decision making in a military setting. In two versions the decision maker obeys his orders, in two he disobeys them to take a normatively appropriate action; one of each decision is successful, one of each fails. Though the cases are identical except for the above differences, successful decisions are considered more justified and to follow from superior decision making processes; decision making processes are perceived as more satisfactory when they lead to success, and successful decision makers are perceived more favorably than their unsuccessful counterparts. Role expectations regarding appropriate action influenced the justification of decisions and perceived favorability of decision makers and interacted with outcome valence in determining the allocation of reward and punishment and the evaluation of the decision making process. The paper discusses implications of the findings to Behavioral Decision Theory, Attribution Theory, and Organizational Learning.     

Harnessing Our Inner Angels and Demons: What We Have Learned About Want/Should Conflicts and How That Knowledge Can Help Us Reduce Short-Sighted Decision Making

ABSTRACT— Although observers of human behavior have long been aware that people regularly struggle with internal conflict when deciding whether to behave responsibly or indulge in impulsivity, psychologists and economists did not begin to empirically investigate this type of want/should conflict until recently. In this article, we review and synthesize the latest research on want/should conflict, focusing our attention on the findings from an empirical literature on the topic that has blossomed over the last 15 years. We then turn to a discussion of how individuals and policy makers can use what has been learned about want/should conflict to help decision makers select far-sighted options.     

Decision Making under Strict Uncertainty: An Experimental Test of Competitive Criteria

In decisions under strict uncertainty individual decision makers have to choose one of a finite number of alternatives with complete information about their outcomes but in the absence of any information about the probabilities of the various states of nature. We report two experiments with multiple decision tasks in which subjects were instructed to rank the alternatives (Experiment 1), or choose the best one (Experiment 2). We test the major decision rules (criteria) which have been proposed for this case in the normative literature with special attention on Hurwicz′s "optimism-pessimism" criterion which is the only one that can accommodate individual differences. Although none of the criteria can account for the results of the majority of the subjects, choices made by a sizable minority of the subjects′ are consistent with Hurwicz′s model. There is no evidence for a systematic relationship between the model′s single "optimism-pessimism" parameter (inferred form choices) and, independently derived, individual measures of optimism (obtained from responses to personality scales). We conclude with a discussion of the difficulty of experimentally implementing strict uncertainty.     

Does temporal preparation increase the rate of sensory information accumulation?

Recent studies showed that temporal preparation, i.e., the ability to prepare for an upcoming stimulus, improves perceptual processing. The mechanisms underlying this benefit are still controversial. Based upon the theoretical framework of accumulation models, it has been proposed that the accumulation of sensory stimulus information begins earlier when participants are temporally prepared than when they are unprepared. Alternatively, however, temporal preparation might also affect the accumulation rate of sensory information. In the present study, we examined these possibilities. Specifically, in three experiments, we manipulated participants' decision criterion. This manipulation should interact with any experimental manipulation affecting the rate of information processing, but produce additive effects with any manipulation affecting the onset of information accumulation rather than its rate. We obtained additive effects on RT, irrespective of whether the decision criterion was manipulated by increasing catch trial proportion or nogo trial proportion. These results suggest that temporal preparation improves perceptual processing by operating on the onset of sensory information accumulation rather than the rate of sensory information accumulation.     

Does Time Constraint on Users Negate the Efficacy of Decision Support Systems?

Time constraint can impair decision performance: time-constrained decision makers process information faster, process less information, and use less rigorous decision strategies. On the other hand, properly designed decision support systems (DSSs) can induce decision makers to process more information and use more rigorous decision strategies, which can result in enhanced performance. In this study, we investigate, drawing on bounded rationality and cost-benefit theories of DSS use, whether these salutary effects of DSSs still hold in time-constrained environments. Our experimental results replicate past research regarding the effects of time constraint and DSSs taken separately and also show that the positive effects of DSSs are maintained when decision makers are under time constraint. That is, consistent with hypotheses, time-constrained participants processed information in a more compensatorylike manner when aided by DSSs than when not. Some of the results suggest that the negative effects of time constraint can be mitigated or even eliminated by the use of DSSs, but some participants did not take full advantage of the DSS to combat time constraint.     

Relative salience affects the process of detecting changes in orientation and luminance

This study tests the effect of relative saliency on perceptual comparison and decision processes in the context of change detection in which distinct visual mechanisms process two features (e.g., luminance and orientation). Townsend and Nozawa's (1995) systems factorial technology was used to investigate the process architecture and stopping rule when deciding whether luminance or orientation of a Gabor patch had changed. Experiment 1 found individual differences in decision strategies when we did not control relative saliency. One group of participants adopted co-active processing, and the other group adopted serial self-terminating processing to detect the change signals. When Experiment 2 eliminated the relative saliency, all but one observer adopted parallel processing and followed a self-terminating rule. These results support the relative saliency hypothesis and highlight the fact that observers adopt different change-detection strategies for two features, especially when relative saliency exists between the two feature dimensions.     

Lay rationalism and inconsistency between predicted experience and decision

Decision‐makers are sometimes depicted as impulsive and overly influenced by ‘hot’, affective factors. The present research suggests that decision‐makers may be too ‘cold’ and overly focus on rationalistic attributes, such as economic values, quantitative specifications, and functions. In support of this proposition, we find a systematic inconsistency between predicted experience and decision. That is, people are more likely to favor a rationalistically‐superior option when they make a decision than when they predict experience. We discuss how this work contributes to research on predicted and decision utilities; we also discuss when decision‐makers overweight hot factors and when they overweight cold factors. Copyright © 2003 John Wiley & Sons, Ltd.     

Reluctant to change: Self-enhancing responses to diverging performance measures

Although there is extensive evidence that past performance influences the propensity to make changes, research on how decision makers respond to diverging performance measures has been sparse. This paper addresses this gap in an experimental and a field study in which we examine how decision makers respond to the ambiguity introduced by two diverging performance indicators of unequal importance. Both studies suggest that decision makers respond to diverging performance indicators in a self-enhancing manner. Decision makers gave importance to a secondary performance indicator only when it helped them maintain a sense of positive performance, that is, when a secondary performance measure was high and a primary performance measure was low. The results suggest that, in contexts in which decision makers are likely to experience diverging performance indicators, perceptions of success and the associated reluctance to make changes might be more pervasive than is often thought.     

小概率权重问题及其市场应用

探讨了决策制定中有关“小概率权重”的理论问题和市场应用问题。若干实验结果表明概率的权重大小不是绝对的,而是背景依赖的,在决策问题中价值对比降低或不存在时,小概率事件权重不太可能被高估。然而,对小概率的权重也会因决策人所处的目前状况有关,个体在财富状况等方面的差异会对小概率事件的赋权产生影响。实验结果还证明有关小概率权重问题的理论发现对彩票价格制定、保险费用确定以及选择有效的有奖促销策略具有重要的启示     

How formulating implementation plans and remembering past actions facilitate the enactment of effortful decisions

Building on prior research studying effortful decision making and enactment processes (Bagozzi, Dholakia, & Basuroy, 2003; BDB), we identify and provide an in‐depth understanding of two specific self‐regulatory strategies: (1) formulating an implementation plan, and (2) remembering past actions, that decision makers can use in facilitating enactment of effortful decisions. The results of three experiments, in which the decision maker's goal and self‐regulatory strategy were manipulated, showed that for goals that decision makers chose volitionally, the motivational effects of both these strategies lay in increasing levels of proximal implementation‐related variables (implementation intentions, plan completeness, plan enactment, and goal realization) significantly. In contrast, for goals that were assigned to participants, these strategies' motivational effects additionally extended to significantly increasing distal goal‐related variables (goal desire, goal intentions, perceived self‐efficacy, and implementation desires). The theoretical implications of our findings are discussed, and future research opportunities are explored. Copyright © 2007 John Wiley & Sons, Ltd.