Judgment and Decision-Making Processes

2021 ◽  
Author(s):  
Richard P. Larrick ◽  
M. Asher Lawson
Keyword(s):  
Decision Making ◽  
Goal Setting ◽  
Judgment And Decision Making ◽  
Choice Architecture ◽  
Retirement Savings ◽  
Wisdom Of Crowds ◽  
Rational Models ◽  
Emotional Processes ◽  
Decision Making Processes ◽  
Professional Fields

The field of judgment and decision making (JDM) arose in psychology to test the rational assumptions posed in other fields such as economics and statistics. This has led to three major contributions of the field. First, to the extent that people systematically deviate from rational models, their decisions are less than optimal. This has consequences for both business practice and for assumptions in many professional fields, such as finance, medicine, and law. Second, the deviation from rational models has led JDM researchers to identify categories of psychological processes that do guide decision making. These include associationistic memory processes, psychophysical processes, emotional processes, and learning. Third, building on the first two contributions, the field of JDM has merged rational and psychological perspectives to explore ways to improve decision making. These methods include a variety of interventions known as nudges, choice architecture, debiasing, and the use of external aids such as algorithms and the wisdom of crowds. The three contributions of JDM help researchers in a number of fields analyze problems and design helpful solutions. Workplace examples include designing better processes for hiring and evaluation, goal setting, and employee retirement savings planning.

scholarly journals Choosing Among Options Presented Sequentially or Simultaneously

2018 ◽  
Vol 28 (1) ◽  
pp. 97-101 ◽  
Author(s):  
Shankha Basu ◽  
Krishna Savani
Keyword(s):  
Decision Making ◽  
Consumer Behavior ◽  
Experimental Economics ◽  
Reference Point ◽  
Eyewitness Identification ◽  
Simultaneous Presentation ◽  
Judgment And Decision Making ◽  
Choice Architecture ◽  
Processing Styles ◽  
Presentation Formats

When choosing among multiple options, people can view the options either one at a time or all together. In this article, we review an emerging stream of research that examines the ways in which viewing options sequentially as opposed to simultaneously influences people’s decisions. Multiple studies support the idea that viewing options simultaneously encourages people to compare the options and to focus on the ways in which the options differ from each other. In contrast, viewing options sequentially encourages people to process each option holistically by comparing the option with previously encountered options or a subjective reference point. Integrating research from judgment and decision making, consumer behavior, experimental economics, and eyewitness identification, we identify ways in which the different processing styles elicited by sequential- and simultaneous-presentation formats influence people’s judgment and decision making. This issue is particularly important because presenting options either sequentially or simultaneously is a key element of choice architecture.

scholarly journals Fear from Afar, Not So Risky After All: Distancing Moderates the Relationship Between Fear and Risk Taking

2021 ◽  
Author(s):  
Lewend Mayiwar ◽  
Fredrik Björklund
Keyword(s):  
Decision Making ◽  
Risk Taking ◽  
Risk Estimation ◽  
Negative Relationship ◽  
Judgment And Decision Making ◽  
Future Research ◽  
Main Effect ◽  
Decision Making Processes ◽  
The Relationship

A growing line of research has shown that individuals can regulate emotional biases in risky judgment and decision-making processes through cognitive reappraisal. In the present study, we focus on a specific tactic of reappraisal known as distancing. Drawing on appraisal theories of emotion and the emotion regulation literature, we examine how distancing moderates the relationship between fear and risk taking and anger and risk taking. In three pre-registered studies (Ntotal = 1,483), participants completed various risky judgment and decision-making tasks. Replicating previous results, Study 1 revealed a negative relationship between fear and risk taking and a positive relationship between anger and risk taking at low levels of distancing. Study 2 replicated the interaction between fear and distancing but found no interaction between anger and distancing. Interestingly, at high levels of distancing, we observed a reversal of the relationship between fear and risk taking in both Study 1 and 2. Study 3 manipulated emotion and distancing by asking participants to reflect on current fear-related and anger-related stressors from an immersed or distanced perspective. Study 3 found no main effect of emotion nor any evidence of a moderating role of distancing. However, exploratory analysis revealed a main effect of distancing on optimistic risk estimation, which was mediated by a reduction in self-reported fear. Overall, the findings suggest that distancing can help regulate the influence of incidental fear on risk taking and risk estimation. We discuss implications and suggestions for future research.

scholarly journals Fear From Afar, Not So Risky After All: Distancing Moderates the Relationship Between Fear and Risk Taking

2021 ◽  
Vol 12 ◽  
Author(s):  
Lewend Mayiwar ◽  
Fredrik Björklund
Keyword(s):  
Decision Making ◽  
Risk Taking ◽  
Risk Estimation ◽  
Negative Relationship ◽  
Judgment And Decision Making ◽  
Future Research ◽  
Main Effect ◽  
Decision Making Processes ◽  
The Relationship

A growing line of research has shown that individuals can regulate emotional biases in risky judgment and decision-making processes through cognitive reappraisal. In the present study, we focus on a specific tactic of reappraisal known as distancing. Drawing on appraisal theories of emotion and the emotion regulation literature, we examine how distancing moderates the relationship between fear and risk taking and anger and risk taking. In three pre-registered studies (Ntotal = 1,483), participants completed various risky judgment and decision-making tasks. Replicating previous results, Study 1 revealed a negative relationship between fear and risk taking and a positive relationship between anger and risk taking at low levels of distancing. Study 2 replicated the interaction between fear and distancing but found no interaction between anger and distancing. Interestingly, at high levels of distancing, we observed a reversal of the relationship between fear and risk taking in both Study 1 and 2. Study 3 manipulated emotion and distancing by asking participants to reflect on current fear-related and anger-related stressors from an immersed or distanced perspective. Study 3 found no main effect of emotion nor any evidence of a moderating role of distancing. However, exploratory analysis revealed a main effect of distancing on optimistic risk estimation, which was mediated by a reduction in self-reported fear. Overall, the findings suggest that distancing can help regulate the influence of incidental fear on risk taking and risk estimation. We discuss implications and suggestions for future research.

scholarly journals Mitigating Advocacy Bias: The Effect of the Reviewer Role on Tax Professional Judgment

2021 ◽  
Author(s):  
Mary E Marshall
Keyword(s):  
Decision Making ◽  
Decision Process ◽  
Emerging Technology ◽  
Judgment And Decision Making ◽  
Professional Judgment ◽  
Tax Professionals ◽  
Decision Making Processes

This study examines the effect of the reviewer role on tax professionals' advocacy bias. Prior research establishes the prevalence of advocacy bias and focuses on whether reviewers can detect preparers' advocacy bias; however, this study examines whether the reviewer role influences tax professionals' judgment and decision-making processes. In an experiment randomly assigning 75 tax professionals to the reviewer and preparer roles, I find professionals who occupy the reviewer role report similar advocacy attitudes to preparers but are significantly less likely to exhibit advocacy bias than preparers. Reviewers also employ a more consistent decision process than those in a preparer role. Results highlight the reviewer role as a moderator of advocacy bias, demonstrating the importance of the reviewer role for firms and clients. Understanding the effects of review responsibilities on professionals at all levels is increasingly important as firms leverage emerging technology to complete tasks traditionally assigned to less experienced professionals.

Professional Judgment and Decision Making: The Role of Intention for Impact

2005 ◽  
Vol 19 (3) ◽  
pp. 303-317 ◽  
Author(s):  
Amanda Martindale ◽  
Dave Collins
Keyword(s):  
Decision Making ◽  
Reflective Practice ◽  
Professional Autonomy ◽  
Judgment And Decision Making ◽  
Professional Judgment ◽  
Future Directions ◽  
Decision Making Processes ◽  
Clinical And Counseling Psychology ◽  
And Training

The field of applied sport psychology has recognized the growing consensus that professional autonomy and discretion brings with it the need to train, regulate, and evaluate practice (Evetts, 2001). However, research into how practitioners’ professional judgment is formed and the decision-making processes involved has not received concurrent attention. This paper illustrates some of the possible outcomes and implications for applied sport psychologists from consideration of Professional Judgment and Decision Making (PJDM) research in other fields such as medicine and teaching and in parallel disciplines such as clinical and counseling psychology. Investigation into the nature of decision content and how the crucial “intention for impact” (Hill, 1992) is formulated carries implications for the assessment, reflective practice, and professional development and training of applied sport psychologists. Future directions in PJDM research are suggested and a call is made for practitioners to be open to involvement in research of this nature.

Quantum modeling of common sense

2013 ◽  
Vol 36 (3) ◽  
pp. 302-302
Author(s):  
Hamid R. Noori ◽  
Rainer Spanagel
Keyword(s):  
Decision Making ◽  
Quantum Theory ◽  
Common Sense ◽  
Judgment And Decision Making ◽  
Fundamental Question ◽  
Bayesian Probability ◽  
Human Judgment ◽  
Decision Making Processes ◽  
Probabilistic Process ◽  
Quantum Modeling

AbstractQuantum theory is a powerful framework for probabilistic modeling of cognition. Strong empirical evidence suggests the context- and order-dependent representation of human judgment and decision-making processes, which falls beyond the scope of classical Bayesian probability theories. However, considering behavior as the output of underlying neurobiological processes, a fundamental question remains unanswered: Is cognition a probabilistic process at all?

Risk tolerance and rationality in the case of retirement savings

2016 ◽  
Vol 33 (4) ◽  
pp. 688-703 ◽  
Author(s):  
Tchai Tavor ◽  
Sharon Garyn-Tal
Keyword(s):  
Decision Making ◽  
Risk Tolerance ◽  
The Other ◽  
Decision Making Process ◽  
Retirement Savings ◽  
Content Type ◽  
Financial Products ◽  
Decision Making Processes ◽  
Different Characteristics ◽  
Level Of Risk

Purpose This research aims to examine the decision-making process involved in saving for retirement and compare it with decision-making processes regarding other financial products (such as loans and savings plans) as well as real products (such as a car or a home). Design/methodology/approach This research is based on the distribution of 107 questionnaires. The questionnaire is composed of two parts: questions examining and focusing on the individual’s decision-making process and questions regarding socioeconomic factors. The average level of risk tolerance is calculated for each respondent with respect to the first four chapters. (These chapters include buying a car or a home, opening a savings plan and taking a loan). Afterward, the consistency (rationality) of the respondents is examined with regard to their decision-making concerning retirement savings plans. Then, an econometric model is used to further test the consistency of the respondents. Findings The results suggest that the level of risk tolerance associated with a retirement savings plan is consistent with that associated with the other financial products, but not with the real products. Majority of the respondents demonstrate high risk tolerance with respect to retirement savings, and their decision-making process is similar to a random thinking process. The level of deliberation and information-gathering regarding retirement savings is the lowest when compared with the other financial and real products examined in this paper. Majority of the respondents are less risk-tolerant toward the other financial and real products. Originality/value In this research, the authors examine how different individuals with different characteristics get different decisions about their personal retirement savings. The authors also examine these decisions’ deviation from the rational model, and compare it with decision-making processes regarding other financial products as well as real products.

Reviewers' Responses to Expectations about the Client and the Preparer

2004 ◽  
Vol 79 (2) ◽  
pp. 497-517 ◽  
Author(s):  
Jay S. Rich
Keyword(s):  
Decision Making ◽  
Relative Proportion ◽  
Judgment And Decision Making ◽  
Financial Statement ◽  
Decision Making Processes ◽  
Experimental Findings

Reviewers use expectations about the client and preparer to help form perceptions of the probability of preparer error and relative accountability to the client and financial statement users (Gibbins and Trotman 2002; Rich et al. 1997b). Experimental findings suggest these perceptions interact to affect reviewers' agreement with the preparers' work and decisions about the amount of preparer follow-up work required. Further, the nature of reviewer cognition, as measured by the relative proportion of critical and supportive reviewer elaboration explains a significant portion of the effect of these perceptions on reviewer judgment and decisions. Elaboration is a stage of reviewers' judgment and decision-making processes in which the reviewer assesses the strengths and weaknesses of the preparer's work (Petty and Cacioppo 1986; Rich et al. 1997b; Lerner and Tetlock 1999). Although the extent of reviewer elaboration is also affected by expectations about the client and the preparer, extent of elaboration does not explain a significant portion of the effect on reviewer judgment. These findings increase our understanding of how and why expectations of the client and preparer interact to affect reviewer judgments and decisions.

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