Outcome effects: The impact of decision process and outcome controllability

An ‘outcome effect’ refers to the phenomenon whereby performance evaluations of decision makers are affected by the outcomes of those decisions. Although some consider such an effect to be a judgmental error, judgment by outcomes may not be dysfunctional when the evaluator does not know how the decision maker chose his or her action. In such situations, outcomes may provide some noisy information about decision quality. We test whether an outcome effect will still occur when the decision methodology and quality are more explicitly identified. Further, we test whether outcome controllability, a previously unexplored moderator variable, will have an impact on the outcome effect. Our first experiment, using undergraduates as subjects, shows that decision quality and controllability have an impact on performance evaluations but that the ubiquitous outcome effect still obtains. These results were replicated with experienced business people, except that controllability only affected their judgments in the case of negative outcomes. Implications of these results are discussed. © 1997 John Wiley & Sons, Ltd.     

Decomposition,Interdependence and Precision in Multiattribute Utility Measurements

Traditionally, parameters of multiattribute utility models, representing a decision maker's preference judgements, are treated deterministically. This may be unrealistic, because assessment of such parameters is potentially fraught with imprecisions and errors. We thus treat such parameters as stochastic and investigate how their associated imprecision/errors are propagated in an additive multiattribute utility function in terms of the aggregate variance. Both a no information and a rank order case regarding the attribute weights are considered, assuming a uniform distribution over the feasible region of attribute weights constrained by the respective information assumption. In general, as the number of attributes increases, the variance of the aggregate utility in both cases decreases and approaches the same limit, which depends only on the variances as well as the correlations among the single-attribute utilities. However, the marginal change in aggregate utility variance decreases rather rapidly and hence decomposition as a variance reduction mechanism is generally useful but becomes relatively ineffective if the number of attributes exceed about 10. Moreover, it was found that utilities which are positively correlated increase the aggregate utility variance, hence every effort should be made to avoid positive correlations between the single-attribute utilities. We also provide guidelines for determining under what condition and to what extent a decision maker should decompose to obtain an aggregate utility variance that is smaller than that of holistic assessments. Extensions of the current model and empirical research to support some of our behavioural assumptions are discussed. © 1997 John Wiley & Sons, Ltd.     

A Field Experiment Comparing Anchored and Unanchored Criteria Weights in the Analytic Hierarchy Process

This study reports the results of a field experiment comparing the predictive validity of two approaches to multicriteria assessments: the absolute measurement mode of AHP and the absolute measurement mode of linking pin AHP. The questioning procedures of the two differ only in that the former employs unanchored criteria weight assessments and the latter anchored criteria weight assessments. The decision task required insurance agents to respond to a mailed questionnaire in which they evaluated non-monetary incentives (contests) according to (1) the public recognition received from winning, (2) the criteria for winning and (3) the nature of the reward. There were four levels for each dimension. A between subjects design was used, with each subject receiving one of the two methods. In addition, all subjects divided 100 points among four contests and these hold-out assignments were employed as a validity check. Linking pin AHP was found to be superior to conventional AHP in this experiment, lending weight to the argument that the use of unanchored criteria weights is problematic. © 1997 by John Wiley & Sons, Ltd. J. Multi-Crit. Decis. Anal. 6 : 140–149 (1997) No. of Figures: 3. No. of Tables: 5. No. of References: 24.     

The influence of number line estimation precision and numeracy on risky financial decision making

This study examined whether different aspects of mathematical proficiency influence one's ability to make adaptive financial decisions. “Numeracy” refers to the ability to process numerical and probabilistic information and is commonly reported as an important factor which contributes to financial decision‐making ability. The precision of mental number representation (MNR), measured with the number line estimation (NLE) task has been reported to be another critical factor. This study aimed to examine the contribution of these mathematical proficiencies while controlling for the influence of fluid intelligence, math anxiety and personality factors. In our decision‐making task, participants chose between two options offering probabilistic monetary gain or loss. Sensitivity to expected value was measured as an index for the ability to discriminate between optimal versus suboptimal options. Partial correlation and hierarchical regression analyses revealed that NLE precision better explained EV sensitivity compared to numeracy, after controlling for all covariates. These results suggest that individuals with more precise MNR are capable of making more rational financial decisions. We also propose that the measurement of “numeracy,” which is commonly used interchangeably with general mathematical proficiency, should include more diverse aspects of mathematical cognition including basic understanding of number magnitude.     

Tests of an indifference rule in variable‐delay and double‐reward choice procedures with humans

Four hundred and fifty participants were recruited from Amazon Mechanical Turk across 3 experiments to test the predictions of a hyperbolic discounting equation in accounting for human choices involving variable delays or multiple rewards (Mazur, 1984, 1986). In Experiment 1, participants made hypothetical choices between 2 monetary alternatives, 1 consisting of a fixed delay and another consisting of 2 delays of equal probability (i.e., a variable‐delay procedure). In Experiment 2, participants made hypothetical monetary choices between a single, immediate reward and 2 rewards, 1 immediate and 1 delayed (i.e., a double‐reward procedure). Experiment 3 also used a double‐reward procedure, but with 2 delayed rewards. Participants in all 3 experiments also completed a standard delay‐discounting task. Finally, 3 reward amounts were tested in each type of task ($100, $1000, and $5000). In the double‐reward conditions (Experiments 2 and 3), the results were in good qualitative and quantitative agreement with Mazur's model (1984, 1986). In contrast, when participants made choices involving variable delays (Experiment 1), there was relatively poor qualitative and quantitative agreement with this model. These results, along with our previous findings, suggest the structure of questions in hypothetical tasks with humans can be a strong determinant of the choice pattern.     

Afraid of one afraid of all: When threat associations spread across face-types

Fear can be acquired for objects not inherently associated with threat (e.g. birds), and this threat may generalize from prototypical to peripheral category members (e.g. crows vs. penguins). When categorizing people, pervasive stereotypes link Black men to assumed violence and criminality. Faces with Afrocentric features (prototypical) are more often associated with threat and criminality than non-Afrocentric (peripheral) faces regardless of whether the individual is Black or White. In this study, using a priming paradigm, threat associations related to negative racial stereotypes were tested as a vehicle for spreading fear across face-type categories. Results showed more negative than positive judgments for White face targets but only when the prime was primarily non-Afrocentric (i.e. Eurocentric). Black face targets were judged more negatively than positively regardless of prime. This suggests some cognitive processes related to threat generalizations of objects extend to complex social categories.     

Similarity,multiple estimations,and the anchoring effect

This paper compares the Selective Accessibility and Scale Distortion theories of anchoring as explanations for anchoring tasks involving (1) perceived dissimilarity between comparison and estimation objects and (2) successive estimation tasks. We begin by describing the two theories of anchoring and what each would predict for these conditions. Two studies are presented in which multiple estimates are made following a single comparison task and the effect sizes of these estimates are correlated to operationalizations of similarity. In the first study, the stimuli varied with respect to how well they fit within an existing category reasonably familiar to the participant population: aircraft. In the second study, the stimuli varied with respect to external features that did not define the category: the brand and location of hotels. In both studies, we find that the anchoring effect size has a positive correlation with the semantic similarity between the comparison and estimation objects, a finding consistent with Selective Accessibility.     

The effect of decision timing on the willingness to costly reward cooperation and punish noncooperation: Sanctioning the past,the present,or the future

Numerous studies have demonstrated that sanctions can promote cooperation. However, it is important to know not only that sanctions can work but also under what conditions people are actually willing to sanction cooperation positively (i.e., reward) or noncooperation negatively (i.e., punish). In this article, we demonstrate that people use sanctions less often and sanction more mildly when they decide about sanctioning before (instead of after) the occurrence of others' (non)cooperation (Experiments 1 and 2), regardless of whether they decide directly afterwards or after a time delay (Experiment 2). Moreover, we reveal that beforehand (as compared with afterwards) people have not yet formed clear sanctioning preferences (Experiment 3). These findings corroborate our reasoning that the decision environment beforehand induces nonconsequential reasoning and thereby hampers people's willingness to sanction. We discuss the theoretical, methodological, and practical implications of our work.     

Too good to be true? Psychological responses to uncommon options in risk–reward environments

Risks and rewards, or payoffs and probabilities, are inversely related in many choice environments. We investigated people's psychological responses to uncommon combinations of risk and reward that deviate from learned regularities (e.g., options that offer a high payoff with an unusually high probability) as they evaluated risky options. In two experiments (N = 183), participants first priced monetary gambles drawn from environments in which risks and rewards were negatively correlated, positively correlated, or uncorrelated. In later trials, they evaluated gambles with uncommon combinations of risk and reward—that is, options that deviated from the respective environment's risk–reward structure. Pricing, response times, and (in Experiment 2) pupil dilation were recorded. In both experiments, participants took more time when responding to uncommon compared to foreseeable options or when the same options were presented in an uncorrelated risk–reward environment. This result was most pronounced when the uncommon gambles offered higher expected values compared to the other gambles in the set. Moreover, these uncommon, high‐value options were associated with an increase in pupil size. These results suggest that people's evaluations of risky options are based not only on the options' payoffs and probabilities but also on the extent to which they fit the risk–reward structure of the environment.     

Compared to Dematerialized Money,Cash Increases Impatience in Intertemporal Choice

When it comes to trading time for money (or vice versa), people tend to be impatient and myopic. Often dramatically so. For illustration, half of people would rather collect $15 now than $30 in 3 months. This willingness to forego 50% of the reward to skip a 3‐month wait corresponds to an annual discount rate of 277%. This article investigates how money's physical form biases intertemporal choice. We ask, what happens to (im)patience (i.e., discount rates) when time is traded against cash rather than against an equivalent sum of dematerialized money? We find that intertemporal decisions pitting time against cash (rather than against dematerialized money) increase impatience. The underlying mechanism relates to the pain of parting from money. Letting go of cash (dematerialized money) we can have now is psychologically more (less) painful, which in turn reduces (increases) our willingness to wait for larger‐later payoffs. Importantly, heightening prevention focus (i.e., concerns for safety and security) moderates this bias. The article concludes by discussing the implications of the research, particularly for the psychology of saving behavior.