Constructivist coding: learning from selective feedback

Although much learning in real-life environments relies on highly selective feedback about outcomes, virtually all cognitive models of learning, judgment, and categorization assume complete and representative feedback. We investigated empirically the effect of selective feedback on decision making and how people code experience with selective feedback. The results showed that, in contrast to a commonly raised concern, performance was not impaired following learning with selective and biased feedback. Furthermore, even in a simple decision task, the experience that people acquired was not a mere recording of the observed outcomes, but rather a reconstruction from general task knowledge.     

Covariation neglect among novice investors

In 4 experiments, undergraduates made hypothetical investment choices. In Experiment 1, participants paid more attention to the volatility of individual assets than to the volatility of aggregated portfolios. The results of Experiment 2 show that most participants diversified even when this increased risk because of covariation between the returns of individual assets. In Experiment 3, nearly half of those who seemingly attempted to minimize risk diversified even when this increased risk. These results indicate that novice investors neglect covariation when diversifying across investment alternatives. Experiment 4 established that naive diversification follows from motivation to minimize risk and showed that covariation neglect was not significantly reduced by informing participants about how covariation affects portfolio risk but was reduced by making participants systematically calculate aggregate returns for diversified portfolios. In order to counteract naive diversification, novice investors need to be better informed about the rationale underlying recommendations to diversify.     

Escalation of commitment with transparent future outcomes

A frequent case of irrational decision making is the tendency to escalate commitment to a chosen course of action after unsuccessful prior investments of money, effort, or time (sunk costs). In previous research it is argued that escalation does not occur when future outcomes and alternative investments are transparent. Inconsistent with this argument, in an experiment in which undergraduates were presented fictitious investment problems with sunk costs, escalation was demonstrated when full information was given about investment alternatives and estimates of future returns. Thus, it is indicated that people may escalate despite knowing that it will not make them economically better off. A more comprehensive understanding of escalation requires disentangling people's noneconomic reasons for escalation.     

Naïve Diversification in the Swedish Premium Pension Scheme: Experimental Evidence

In the Swedish Premium Pension Scheme (PPS) all citizens in paid employment allocate part of their public pension savings to mutual funds. In so doing they tend to distribute their choices maximally across different stock fund categories. It is hypothesised that this reflects the naïve application of a variety‐inducing diversification heuristic. The results of two experiments simulating choices of fund categories in the PPS support this hypothesis by showing that participating undergraduates chose stock funds investing in overlapping and non‐overlapping markets or industries in a way demonstrating failure to take into account covariation among fund returns. Administrators of the PPS and similar defined‐contribution pension plans should provide participants with comprehensive advice on how to diversify their investment. Dans le régime de retraite suédois (PPS), tous les citoyens ayant un emploi salarié allouent une part de l'épargne de leur retraite publique à des fonds d'investissements. Ce faisant, ils tendent majoritairement à répartir leurs choix dans différentes catégories de fonds. On a fait l'hypothèse que cela reflète l'application naïve d'une heuristique de la diversification. Les résultats de deux expérimentations simulant des choix entre différentes catégories de fonds pour le PPS confirment cette hypothèse : les sujets (étudiants) ont choisi des fonds en actions et devaient investir sur des marchés ou dans des branches industrielles relevant ou non du même secteur économique et cela d'une façon qui mettait en évidence leur incapacitéà prendre en considération le fait que le retour sur investissement de différents fonds pouvait être lié. Les administrateurs du PPS et de plans de pensions avec versements programmés devraient fournir aux participants des conseils avisés sur la façon de diversifier leur investissement.     

Encountering the Body at the Site of the Suicide: A Population‐Based Survey in Sweden

Encountering the body of a child who died by suicide at the site of death is believed to be especially harmful for bereaved parents. We investigated the association between encountering the body at the site of the suicide and psychological distress in 666 suicide‐bereaved parents. Parents who had encountered their child's body at the site of the suicide (n = 147) did not have a higher risk of nightmares (relative risk [RR] 0.95, 95% confidence interval [CI] 0.67–1.35), intrusive memories (RR 0.97, 95% CI 0.84–1.13), avoidance of thoughts (RR 0.97, 95% CI 0.74–1.27), avoidance of places or things (RR 0.91, 95% CI 0.66–1.25), anxiety (RR 0.93, 95% CI 0.64–1.33), or depression (RR 0.94, 95% CI 0.63–1.42) compared with parents who had not encountered the body (n = 512). Our results suggest that losing a child by suicide is sufficiently disastrous by itself to elicit posttraumatic responses or psychiatric morbidity whether or not the parent has encountered the deceased child at the site of death.     

Social Memory of Preschool Girls and Boys

In two experiments, 40 female and 40 male preschoolers attending a day-care center were shown photographs of children attending the center, and were asked either to name each pictured child (recall condition) or to point to the picture of the child as the experimenter said the child's name (recognition condition). In both experiments, girls and boys did not differ significantly in the number of correct identifications on either the recall or recognition tasks. The results do not support Feldstein's (1976) conclusion that preschool girls show better social memory than preschool boys.