Effect of cognitive distortions caused by errors in information processing on decision-making by economic agents

2021 ◽  
Vol 19 (1) ◽  
pp. 121-138
Author(s):  
Mikhail V. GRECHKO ◽  
Larisa A. KOBINA
Keyword(s):  
Decision Making ◽  
Consumer Choice ◽  
Institutional Economics ◽  
Cognitive Biases ◽  
Cognitive Distortions ◽  
A Priori ◽  
Economic Agents ◽  
Survey Techniques ◽  
The Face ◽  
Probability Information

Subject. This article examines the issues related to the cognitive potential of behavioral and institutional economics and irrationality in decision-making. Objectives. The article aims to develop an application toolkit to investigate the mechanism of cognitive biases influence on decision-making by economic agents. Methods. For the study, we used the prospect theory and expert survey techniques. Results. Based on the cognitive potential of interdisciplinary decision theory, the article proves that most economic agents in the face of incomplete information prefer individual information, rather than a priori probability information. Conclusions. The results of the study can be useful to create a tool to manage consumer choice.

The transformation of the decision-making process on the part of economic agents influenced by social constraints

2020 ◽  
Vol 16 (7) ◽  
pp. 1202-1222
Author(s):  
M.V. Grechko ◽  
L.A. Kobina ◽  
S.A. Goncharenko
Keyword(s):  
Decision Making ◽  
Consumer Choice ◽  
Social Constraints ◽  
Decision Making Process ◽  
Economic Knowledge ◽  
Economic Agents ◽  
The Individual ◽  
Contextual Environment ◽  
Economic Constraints ◽  
External Signals

Subject. The article focuses on the decision-making mechanism used by economic agents given the existing social constraints. Objectives. We devise applied toolkit to study how socio-economic constraints transform the decision-making mechanism used by economic agents. Methods. The study involves means of the expert survey, the method that streamlines economic knowledge. Results. Social constraints are illustrated to influence the decision-making mechanism used by economic agents, assuming that the individual mind relies on specific mechanisms to make judgments and decisions. Generally, the mechanisms are very useful, however they may generate serious errors during the decision-making process. Given the social constraints, economic agents were found to follow four mental models to make their decisions in case of the full or partial uncertainty, i.e. the representative relevance, accessibility, relations, heuristics (modeling). Conclusions and Relevance. The scientific ideas herein show that the inner architecture of a choice an individual makes determines his or her decisions. The decisions often depend on the contextual environment that gives external signals perceived by the individual while evaluating alternative ways. The findings can possibly be used as a mechanism to manage the consumer choice.

COGNITIVE BIASES IMPACT ON THE DECISION MAKING INNOVATION PROCESS

2021 ◽  
Vol 1 (6) ◽  
pp. 133-141
Author(s):  
A. А. ANTIPOV ◽  
◽  
S. V. MURASHOVA ◽  
A. S. NIKOLAEV ◽  
P. A. ORLIKOVA ◽  
...  
Keyword(s):  
Decision Making ◽  
Cognitive Behavioral Therapy ◽  
Cognitive Biases ◽  
Cognitive Distortions ◽  
Behavioral Therapy ◽  
Innovation Process ◽  
Cognitive Behavioral ◽  
Behavior Changes ◽  
State Corporation ◽  
Real Increase

The article discusses the concept, prerequisites for the appearance, typology of cognitive distortions, as well as strategies for working with them using cases and trainings, the ways of increasing the efficiency of decisionmaking in the process of managing innovative activities are proposed. The authors have shown the productivity of case-situations of pushing, stimulating, explaining, as well as trainings directly related to working on distortions, behavior changes (reframing) and cognitive-behavioral therapy. Approbation of the described model of working with cognitive distortions was carried out at the enterprise JSC “Electrochemical Plant” of the state corporation “Rosatom”. The authors revealed a real increase in the performance of the organization's employees.

scholarly journals Enhancing Healthcare Decision-Making Process: Findings from Orthopaedic Field

2020 ◽  
Vol 10 (4) ◽  
pp. 94
Author(s):  
Irene Schettini ◽  
Gabriele Palozzi ◽  
Antonio Chirico
Keyword(s):  
Decision Making ◽  
Clinical Decision Making ◽  
Cognitive Biases ◽  
Cognitive Distortions ◽  
Clinical Decision ◽  
Decision Making Process ◽  
Healthcare Outcomes ◽  
Post Discharge ◽  
Whole Process ◽  
Quality Control Tool

In the healthcare field, the decision-making process is part of the broad spectrum of “clinical reasoning”, which is recognised as the whole process by which a physician decides about patients’ treatments and cares. Several clinicians’ intrinsic variables lead to this decisional path. Little is known about the inference of these variables in triggering biases in decisions about the post-discharge period in the surgical field. Accordingly, this research aims to understand if and how cognitive biases can affect orthopaedists in decision-making regarding the follow-up after knee and hip arthroplasty. To achieve this goal, an interview-based explorative case study was run. Three key-decisional orthopaedic surgeons were interviewed through a quality control tool aimed at monitoring the causes and effects of cognitive distortions. Coherently with the literature, eight biases come to light. All the interviewees agree on the presence of four common biases in orthopaedic surgery (Affect heuristic, Anchoring, Halo effect, Saliency). The other biases (Groupthink, Availability, Overconfidence, Confirmation), instead, depending on specific physicians’ intrinsic variables; namely: (i) working experience; (ii) working context. This finding contributes to the debate about the application of cognitive tools as leverage for improving the quality of clinical decision-making process and, indirectly, enhancing better healthcare outcomes.

scholarly journals Application of QFD and RDB Analysis Methods for Creation of Targeted Service Offering (Using Example of SFU Higher School of Business)

2021 ◽  
Vol 12 (1) ◽  
pp. 048-058
Author(s):  
Alexey V. Shcherbina ◽  
◽  
Mikhail V. Grechko ◽  
Mikhail A. Stasev ◽  
◽  
...  
Keyword(s):  
Behavioral Economics ◽  
Customer Loyalty ◽  
Consumer Choice ◽  
Behavioral Science ◽  
Economic Knowledge ◽  
Economic Agents ◽  
Survey Techniques ◽  
Perspective Theory ◽  
Educational Product ◽  
Service Offering

Importance. The article is devoted to research, as well as systematization and integration of knowledge in the aspect of managing consumer choice and customer loyalty of consumers of educational products, taking into account the transforming strategy of behavior of economic agents. Objectives. As the goal of the study, the problem of developing application tools for managing the targeted supply of educational products and customer loyalty was identified, based on the QFD and RDB methodologies – analysis taking into account the transformation of the classical purchase cycle. Methods. The study is based on the cognitive potential of behavioral economics, cognitive psychology, the results of perspective theory, expert survey techniques, QFD and RDB - analyses that made it possible to systematize economic knowledge, in the context of the study of the problem of developing applied tools for managing the targeted supply of educational products and customer loyalty. All this eventually allowed us to give examples of the application of tools for personalized management of client loyalty of economic agents. Results. Based on the cognitive potential of behavioral economics, the use of behavioral science tools in economic theory, in work, using the QFD matrix, a target set of consumer factors for choosing an educational product was determined. In addition, on the example of the Higher School of Business, the SFU, relying on the cognitive potential of the RDB model, managed to reveal the special significance of the factors for choosing the educational product of the Higher School of Business, as well as determine the flaw in Resonance and propose measures aimed at eliminating the identified problem zone. Conclusions and Importance. The present text systematizes the main conclusions of the study. The results obtained should subsequently become the basis for the formation of a base of practical tools for managing consumer choice and customer loyalty of consumers of educational services.

The Microeconomics of Choice under Risk and Uncertainty: Where Are We?

2014 ◽  
Vol 39 (1) ◽  
pp. 21-40 ◽  
Author(s):  
WDA Bryant
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Utility Maximization ◽  
Ambiguity Aversion ◽  
Risky Choice ◽  
Choice Situation ◽  
Risk And Uncertainty ◽  
Business Decision ◽  
Economic Agents ◽  
The Face

Financial decision-making is not straightforward, in part, because such decisions generally involve comparing financial assets the payoffs from which are subject to risk and uncertainty. Given that situation, two questions naturally arise: How do economic agents go about the business of making choices in the face of risk and uncertainty? And, how should economic agents make choices in the face of risk and uncertainty? This paper concentrates on the first of these questions and discusses some of the main attempts made by economic theory to understand how economic agents go about the business decision-making under conditions of risk and uncertainty. Theoretical possibilities considered in the context of decisions under conditions of risk include: Expected value maximization, Expected utility maximization, Rank dependent utility maximization, Prospect theory, and the Topology of fear approach to decision-making in the face of catastrophic risk. This paper also considers empirical tests of these theoretical possibilities and some of the anomalies and responses thrown up by those tests such as: Allais Paradox, Discovered Preference Hypothesis, and the choice behaviour of CEOs when faced with risk. The paper concludes with a brief excursion into choice under uncertainty where, unlike in risky choice situation, the existence of objective probabilities over states of the world cannot be relied on. In that context, the author briefly canvases the Subjective Expected Utility approach — which is unable in general to account for ambiguity aversion — Choquet utility, Wald's Multiple Priors, and the Case Based approach This paper highlights the fact that the rich and fascinating field of decision-making under risk and uncertainty is characterized by a constant interplay between theoretical conjecture, empirical testing, and theoretical refinement. Such interplay is mirrored by this paper and contributions in the Colloquium Section of this Issue, where the thoughts of practitioners and academics interact.

scholarly journals COVID-19 reopening strategies at the county level in the face of uncertainty: Multiple Models for Outbreak Decision Support

2020 ◽  
Author(s):  
Katriona Shea ◽  
Rebecca K. Borchering ◽  
William J.M. Probert ◽  
Emily Howerton ◽  
Tiffany L. Bogich ◽  
...  
Keyword(s):  
Public Health ◽  
Decision Making ◽  
Cognitive Biases ◽  
The United States ◽  
Scientific Uncertainty ◽  
Multiple Models ◽  
County Level ◽  
Trade Off ◽  
Considerable Uncertainty ◽  
The Face

AbstractPolicymakers make decisions about COVID-19 management in the face of considerable uncertainty. We convened multiple modeling teams to evaluate reopening strategies for a mid-sized county in the United States, in a novel process designed to fully express scientific uncertainty while reducing linguistic uncertainty and cognitive biases. For the scenarios considered, the consensus from 17 distinct models was that a second outbreak will occur within 6 months of reopening, unless schools and non-essential workplaces remain closed. Up to half the population could be infected with full workplace reopening; non-essential business closures reduced median cumulative infections by 82%. Intermediate reopening interventions identified no win-win situations; there was a trade-off between public health outcomes and duration of workplace closures. Aggregate results captured twice the uncertainty of individual models, providing a more complete expression of risk for decision-making purposes.

Decision Making Styles and Consumer Choice

2008 ◽  
Author(s):  
Thomas Nygren ◽  
Rebecca White ◽  
Kristi Snuttjer
Keyword(s):  
Decision Making ◽  
Consumer Choice ◽  
Decision Making Styles

Penilaian Kinerja Dosen Dengan Menggunakan Metode AHP Studi Kasus di STIE Ahmad Dahlan Jakarta

Liquidity ◽  
2018 ◽  
Vol 2 (1) ◽  
pp. 100-109
Author(s):  
Ellya Sestri
Keyword(s):  
Decision Making ◽  
Performance Appraisal ◽  
Technological Progress ◽  
Pairwise Comparison ◽  
Relative Importance ◽  
Faculty Performance ◽  
Business World ◽  
The Face ◽  
Hierarchy Process ◽  
Rule Out

An increasingly rapid technological progress in the era of globalization in the business world, so do not rule out the possibility that a decision-making is something that is very vital in determining the decisions to be taken in the face of competitive business world. Decision making can be influenced by several aspects, this can affect the speed of decision making by the decision maker in which decisions must be quick and accurate. Lecturer Performance Assessment Using the Analytical Hierarchy Process is a decision support system that aims to assess faculty performance according to certain criteria. This system of faculty performance appraisal criteria to map a hierarchy, where each hierarchy will be performed pairwise comparison, the pairwise comparisons between criteria, so to get a comparison of the relative importance of criteria with each other. The results of this comparison is then analyzed to obtain the priority of each criterion. Once completed and performed an assessment of alternative options to be compared and calculated to obtain the best alternatives according to established criteria.

Institutionalism: Theory, Decision-making Basis, Method of Criticism

2009 ◽  
pp. 110-124 ◽  
Author(s):  
A. Moskovsky
Keyword(s):  
Decision Making ◽  
Institutional Economics ◽  
Economic Reforms ◽  
The State ◽  
Economic Approach ◽  
Main Attention ◽  
Technological Imperative ◽  
Logical Inconsistency ◽  
Basis Method

The author analyzes the state of institutional economics in contemporary Russia. It is characterized by arbitrary confusion of the ideas of «old», «new» and «mathematical» versions of institutionalism which results in logical inconsistency and even eclectics to be observed in the literature. The new and mathematical versions of institutionalism are shown to be based on legal, political and mathematical determinism tightly connected with the so-called «economic approach» (G. Becker). The main attention is paid to the discussion of theoretical and practical potential of the contemporary classical («old») institutionalism. The author focuses on its philosophical grounds and its technological imperative, the institution of science, the method of criticism, the opportunity of using classical institutionalist ideas as the ideology of economic reforms in Russia.

Innovative Approach to Information Search by Example of a Patent Analysis of an Important Substitution Plan

2020 ◽  
pp. 143-157
Author(s):  
Maria A. Milkova
Keyword(s):  
Information Search ◽  
Topic Modeling ◽  
Cognitive Biases ◽  
A Priori ◽  
Import Substitution ◽  
Innovative Approach ◽  
Iterative Search ◽  
Comprehensive Picture ◽  
Priori Information ◽  
Selection Of

Nowadays the process of information accumulation is so rapid that the concept of the usual iterative search requires revision. Being in the world of oversaturated information in order to comprehensively cover and analyze the problem under study, it is necessary to make high demands on the search methods. An innovative approach to search should flexibly take into account the large amount of already accumulated knowledge and a priori requirements for results. The results, in turn, should immediately provide a roadmap of the direction being studied with the possibility of as much detail as possible. The approach to search based on topic modeling, the so-called topic search, allows you to take into account all these requirements and thereby streamline the nature of working with information, increase the efficiency of knowledge production, avoid cognitive biases in the perception of information, which is important both on micro and macro level. In order to demonstrate an example of applying topic search, the article considers the task of analyzing an import substitution program based on patent data. The program includes plans for 22 industries and contains more than 1,500 products and technologies for the proposed import substitution. The use of patent search based on topic modeling allows to search immediately by the blocks of a priori information – terms of industrial plans for import substitution and at the output get a selection of relevant documents for each of the industries. This approach allows not only to provide a comprehensive picture of the effectiveness of the program as a whole, but also to visually obtain more detailed information about which groups of products and technologies have been patented.

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