The Psychology of Judgment and Decision MakingScott Plous Wesleyan University, 1993

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Overview

Compendium that aggregates decades of research on judgment and decision making

Primarily from Psychology, but pulls in a few other fields

Our approach today: Complete the Reader survey as a class Walk through each chapter

Describe the concepts Discuss examples from reader survey Discuss application to MIS research

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Section IPerception, Memory, and Context

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Ch1: Selective Perception

There is no such thing as immaculate perception. What you see depends upon what you thought before you looked.-Myron Tribus

There is no such thing as context-free decision making. All judgments and decisions rest on the way we see and interpret the world.-Scott Plous

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Ch2: Cognitive Dissonance

We are motivated to reduce or avoid psychological inconsistencies

Self-perception theory Dissonance has more to do with how people infer their beliefs from watching

themselves behave

The brain wants the world to make sense and will create explanations such that it does i.e. if I perform a task for a small amount of money, I must derive enjoyment from

the task, but if I was highly compensated, I was motivated by the money.

Can be pre-decisional or post-decisional

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Ch2: Cognitive Dissonance

Relevance to MIS

System design

User behavior

Deception detection Induces physiological changes

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Ch3: Memory and Hindsight Biases

What is memory? Not copies of experiences on deposit in a data bank Reconstructive, dependent upon contextual factors

Hindsight bias Tendency to view what has already happened as inevitable and obvious without

recognizing that retrospective knowledge is influencing one’s judgment Strategies to avoid

Stop to consider reasons why the results may have turned out differently

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Ch3: Memory and Hindsight Biases – survey examples

Memory is reconstructive and highly dependent upon contextual factors:

(34a) "The ants ate the jelly which was on the table."

Did this sentence appeared before or not? Confidence rating: ___

(34b) "The ants in the kitchen ate the sweet jelly which was on the table."

Did this sentence appeared before or not? Confidence rating: ___

(34c) "The ants ate the sweet jelly."

Did this sentence appeared before or not? Confidence rating: ___

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Ch3: Memory and Hindsight Biases

Relevance to MIS

System design

System adoption

Acceptance of technology

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Ch4: Context Dependence

Contrast effects Our perceptions can be different based upon the context in which they occur Hot, cold, warm water

Primacy effect Characteristics appearing early influence impressions more than ones appearing later

Envious, stubborn, critical, impulsive, industrious, and intelligent vs.

Intelligent, industrious, impulsive, critical, stubborn, and envious

Recency effect Able to remember more recent information more readily than older information

Halo effect Tendency to treat a set of characteristics in a similar manner – all high, all low – even when they should

not necessarily be related

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Ch4: Context Dependence

Relevance to MIS

System design

How interfaces are perceived (contrast/halo)

Efficiency – what do you look at first and how does that impact context/decisions

Recency – what does the system expect the user to remember (use/training)

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Section IIHow questions affect answers

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Ch5: Plasticity

Plasticity: Malleability of responses based on situation

Order effects The order in which questions are asked can influence the perceived context and as a result influence

responses

Pseudo-opinions When people are familiar with an issue, context and order produce marginal changes of opinion When people have little familiarity, they are more easily influenced If they know nothing, sometimes they will still offer a “pseudo-opinion” Can drastically influence political affairs

Inconsistency Discrepancy between two related attitudes or between an attitude and a corresponding behavior Can illustrate cognitive dissonance and also that situational factors can introduce complications –

abstract attitudes can bear little relation to specific actions

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Ch5: Plasticity

Relevance to MIS

System design Order effects in UI

Adoption Pseudo-opinions and inconsistency can impact project success

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Ch6: The Effects of Question Wording and Framing

It’s not what you askIt’s how you ask

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Ch6: The Effects of Question Wording and Framing (cont.)

Word choice, safe vs. safer

Forced choice (e.g., faster vs. slower) vs. middle category (e.g., faster vs. same as now vs. slower)

Open (fill in the blank) vs. closed (a, b, c, and or d, etc.)

Norbert Schwarz et al. noted “Response scales are not simply ‘measurement devices’ that respondents use to report their behaviors. Rather . . . respondents may use the range of behaviors [emphasis added] described in the response alternatives as a frame of reference in estimating and evaluating their own behavior [emphasis added]” (as cited in Plous 1993, p. 67).

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Ch6: The Effects of Question Wording and Framing (cont.)

Social desirability – some answers may be more socially desirable than others

Allowing vs. forbidding Types of speech Peep shows, X-rated movies “Framing”

Tversky and Kahneman stated a decision frame [emphasis added] is “the decision maker's conception of the acts, outcomes, and contingencies associated with a particular choice” (as cited in Plous 1993, p. 69).

Very, very important in information security, gain security or lose freedom

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Ch6: The Effects of Question Wording and Framing (cont.)

Deductive logic “Extra” taxes for childless families, not tax deductions for families with children

Psychological accounting Psychological accounting requires some notion of reference points/accounts. We just saw an MIS Speaker Series on Mental Accounting (without reference).

Before relying on results from survey research [emphasis added] and other studies of judgment and decision making [emphasis added], it is important to consider how people's answers would have changed as a function of factors such as:

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Ch6: The Effects of Question Wording and Framing (cont.)

The order in which the questions were presented

The context in which the questions appeared

Whether the question format was open or closed

Whether the questions were filtered

Whether the questions contained catch phrases

The range of suggested response alternatives

The order in which response alternatives were presented

Whether middle categories were provided

Whether problems were framed in terms of gains or losses

* More to come

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Ch6: The Effects of Question Wording and Framing

Relevance to MIS

Measures Survey or not, you have to ask questions

System design UI Question wording and framing

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Section IVHeuristics and Biases

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Ch10: The Representativeness Heuristic

The Law of Small Numbers

The Hot Hand

Neglecting Base Rates

Nonregressive Prediction

Clinical Versus Actuarial Prediction

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Ch10: The Representativeness Heuristic

Relevance to MIS

System design What information do we present? How to mitigate heuristic based bias with UI design

Decision making Understanding decision-making heuristics key to interpreting user behavior

Summarization and dashboarding Are we providing the correct context (base rates, etc.)

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Ch11: The Availability Heuristic

Availability Goes A Wry

The Limits of Imagination

Denial Nuclear war

Vividness The Legal Significance of Guacamole

A Disclaimer

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Ch11: The Availability Heuristic

Relevance to MIS

System design What comparisons are people making when they interact with the system?

Experiments and Measures

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Ch12: Probability and Risk

Confusion of The Inverse

It'll Never Happen To Me

Compound Events

Conservatism

The Perception of Risk

Do Accidents Make Us Safer?

Recommendations

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Ch12: Probability and Risk

Relevance to MIS

IT deployment and valuation

User actions

Experiments and Measures

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Ch13: Anchoring and Adjustment

Thinking About The Unthinkable

How Real is Real Estate?

Further Examples of Anchoring

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Ch13: Anchoring and Adjustment

Relevance to MIS

System design

User interface What information is presented as anchor?

IT Deployment and economics

Experiments and Measures

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Ch14: The Perception of Randomness

An Unlikely Development

Luck And Superstition

Recognizing Randomness

Seeing Patterns In Randomness

Can People Behave Randomly?

Learning To Act Randomly

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Ch14: The Perception of Randomness

Relevance to MIS

ADMIT & CAT People can be trained to behave randomly

UI for data analysis and pattern recognition

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Ch15: Correlation, Causation, and Control

Does God Answer Prayers?

Illusory Correlation

Invisible Correlations

Getting By

Causalation

Heads I Win, Tails It's Chance

The Kind Of Help That Doesn't Help

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Ch15: Correlation, Causation, and Control

Relevance to MIS

Experiments and Measures

Data analysis Researcher User

Prescriptive systems and behavior change Perception of control

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Ch16: Attribution Theory

Analysis of Variance Framework The Person - Consensus The Entity – Stimulus The Time – Circumstance

A Lack Of Consensus

Salience

The Fundamental Attribution Error

My Situation Is Your Disposition there is a pervasive tendency for actors to attribute their actions to situational requirements,

whereas observers tend to attribute the same actions to stable personal dispositions.

Trading Places

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Ch16: Attribution Theory – cont.

Clinical Implications For observers, the actor is most salient; for the actor, situational demands are salient

Other Attributional Biases "self-serving" bias "egocentric" biases "positivity effect" is a tendency to attribute positive behaviors to dispositional factors and negative

behaviors to situational factors "negativity effect" disliked others the "ultimate attribution error“ the tendency to ascribe less variability to others than to oneself

Debiasing Pay Close Attention to Consensus: If most people behave similarly when confronted by the same situation, a

dispositional explanation is probably unwarranted. Instead, observers should look to situational factors for an explanation of behavior.

Ask How You Would Have Behaved In The Same Circumstance

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Ch16: Attribution Theory

Relevance to MIS

Experiments and Measures Data analysis

User behavior and prescriptive systems

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Section VThe Social Side of Judgment and Decision Making

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Ch17: Social Influences

Social Facilitation

Social Loafing Scene 1: "Let That Girl Alone!“ Scene 2: Tunnel Vision Scene 3: Picking Up The Pieces

Bystander Intervention

Social Comparison Theory

Taking Cues From Those Who Are Similar

Social Analgesia

Conformity

Minority Influence

Groupthink

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Ch17: Social Influences

Relevance to MIS

Individual behavior when a group is present

Motivation

Experiments and Measures Social desirability

Society and culture

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Ch18: Group Judgments and Decisions

Group Errors and Biases

Group Polarization

Horse Sense

Are Several Heads Better Than One?

The Benefits Of Dictatorship

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Ch18: Group Judgments and Decisions

Relevance to MIS

Group behavior and interactions

System design Group Support Systems Online interaction Social networking

Experimental design

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Section VICommon Traps

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Ch19: Overconfidence

The Case Of Joseph Kidd

Extreme Confidence

When Overconfidence Becomes A Capital Offense

Calibration

The Correlation Between Confidence And Accuracy

How Can Overconfidence Be Reduced? Stop to consider reasons why your judgment might be wrong.

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Ch20: Self-Fulfilling Prophecies

Guess Again

Self-Perpetuating Social Beliefs

The Pygmalion Effect

In The Minds Of Men

Self-Fulfilling Racial Stereotypes

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Ch21: Behavioral Traps

A Taxonomy Of Traps Time delay traps Ignorance traps Investment traps Deterioration traps Collective traps

Prisoner's Dilemma

How Much Would You Pay For A Dollar?

Knee Deep In The Big Muddy

The Great Escape

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Conclusions

Psychological biases are an intrinsic part of the way humans make judgments and decisions

It is important to take these biases into consideration when conducting MIS research

System Design Experiment Design

Biases impact not just subjects, but researchers themselves