Delayed Evacuation after a Disaster Because of Irrational Prediction of the Future Cumulative Precipitation Time Series under Asymmetry of Information

This study investigated biased prediction of cumulative precipitation, using a variety of patterns of histories of cumulative precipitation, to explore how such biased prediction could delay evacuation or evacuation orders. The irrationality in predicting the future of cumulative precipitation was examined to obtain insights into the causes of delayed evacuation or evacuation orders using a simulated prediction of future cumulative precipitation based on the cumulative precipitation history. Anchoring and adjustment, or availability bias stemming from asymmetry of information, was observed in the prediction of cumulative precipitation, and found to delay evacuation or evacuation orders.

Cognitive Biases Among Millennial Indian Investors: Do Personality and Demographic Factors Matter?

This study examines the influence of financial literacy, gender, annual family income and neuroticism personality trait on the probability of millennial equity investors to suffer from selected cognitive biases (availability bias, representative bias, mental accounting bias and anchoring and adjustment bias). Binary logistic regression method is applied to conduct the analysis. Results of the current study indicate that selected demographic factors and investor personality are significant in predicting the probability of millennial Indian investor to suffer from the biases under consideration. For availability bias, financial literacy; for representative bias, financial literacy, neuroticism and gender; for mental accounting bias, neuroticism, gender and annual family income; and for anchoring and adjustment bias, financial literacy, neuroticism, gender and annual family income are found as significant predictors.

Flooding the Zone: How Exposure to Implausible Statements Shapes Subsequent Belief Judgments

Much scholarly attention has been paid to the effects of misinformation on beliefs and attitudes, but rarely have studies investigated potential downstream effects of misinformation exposure on belief judgments involving subsequent factual statements. Drawing from work on anchoring-and-adjustment and defensive reasoning, this study examines how exposure to initial falsehoods that vary in terms of their plausibility shapes subsequent belief judgments. Across two survey experiments, we find that initial exposure to a less plausible statement decreases belief in subsequent statements, whether true or false. This order effect has implications for misinformation research, as studies examining audience responses to a single falsehood may fail to capture the full range of misinformation effects. Other implications are discussed in this article.

Analisis Pengaruh Behavioural Finance Terhadap Pengambilan Keputusan Investasi Investor di Kepulauan Riau

Perkembangan ekonomi global yang semakin maju dan cepat akibat adanya perkembangan teknologi menyebabkan kegiatan berinvestasi semakin dipermudah. Hal tersebut membuat minat investasi di Indonesia selama empat tahun terakhir berkembang sangat pesat. Akan tetapi, peningkatan jumlah investor dan banyaknya keuntungan yang ditawarkan tidak menggambarkan secara nyata kinerja investasi para investor itu sendiri. Kinerja investasi yang baik juga memiliki korelasi kuat dengan pengambilan keputusan investasi yang baik dan rasional. Seorang investor yang baik biasanya akan membuat suatu keputusan investasi yang rasional, tetapi nyatanya para investor sering kali membuat keputusan investasi yang buruk akibat pengaruh faktor psikologis dalam diri mereka sendiri. Sebagai contohnya, pada masa pandemi COVID-19 ini, IHSG Indonesia bahkan seluruh negara mengalami penurunan drastis akibat kepanikan para investor. Dari contoh tersebut dapat kita ketahui bahwa peran faktor psikologis sangatlah penting. Penelitian ini dibuat dengan tujuan untuk mencari tahu dan menguji faktor-faktor behavioural finance yang memiliki pengaruh kepada para investor di Kepulauan Riau dalam proses pengambilan keputusan investasi. Faktor-faktor behavioural finance yang diuji pada penelitian ini adalah representativeness bias, availability bias, overconfidence bias, loss aversion bias, dan anchoring and adjustment bias. Sampel yang digunakan sebagai bahan pengujian berjumlah 133 responden yang merupakan investor aktif di Kepulauan Riau. Hasil pengujian menunjukkan bahwa, variabel loss aversion dan anchoring & adjustment bias berpengaruh positif terhadap proses pengambilan keputusan investasi para investor di Kepulauan Riau, sedangkan variabel representativeness bias, overconfidence, dan availability bias tidak memiliki pengaruh yang signifikan.

Using Self-Generated Priors in Division Leads to Biased Consumer Judgments

Consumers often have to make divisions to evaluate attributes. In six experiments (total N = 3296, four preregistered), this research shows that consumers may rely on their prior for the attribute to generate an estimate rather than divide following a normative procedure. That is, consumers will recruit typical values of the attribute from memory and use them when dividing. This process influences consumers’ judgments. When the actual attribute value is above the attribute prior, it tends to be underestimated, and when it is below the attribute prior, it tends to be overestimated. When the attribute is a product attribute (such the miles-per-gallon a car can drive), this decreases its attractiveness. When the attribute is a company-wide attribute (such as median wage), this intuitive approach results in corresponding changes in company evaluations, willingness-to-pay, and product choice. The authors discuss theoretical implications for consumers’ numerical cognition, anchoring and adjustment, and perceptions of income inequality. Practical implications for the communication and disclosure of product attribute information and income inequality for managers and policymakers are also discussed.

Anchoring and adjustment effects on audit judgments: experimental evidence from Switzerland

PurposeThe purpose of this study is to illustrate the potentially detrimental effects on audit decision-making of certain judgmental heuristics, which can lead to systematic judgmental biases. This paper provides background on the heuristics and biases approaches to decision-making to increase auditors' awareness of the anchoring and adjustment effects affecting audit judgments adversely.Design/methodology/approachThis study reports the results of an experimental research design analyzing the audit judgment of 85 auditors in Switzerland.FindingsBased on the results of the experiment, the results indicate evidence on the existence of the anchoring and adjustment heuristic in Swiss audit judgments. The authors could identify an influence of the audit company size, the auditors' experience and the auditors' knowledge about behaviorism and anchor heuristic with regard to the anchoring and adjustment effect on audit judgment.Research limitations/implicationsThe experimental tasks were relatively simple abstractions from the more complex analytical review situations faced by practicing auditors. Due to the small sample size, the authors cannot ensure representativeness of the results.Practical implicationsProfessional judgment is a skill that auditor acquires overtime, combined with experience and knowledge, that allows him to achieve reasonable judgments, being independent of other opinions and free from material biases in a given circumstance. Our results show that auditors who are aware of biases and heuristics are less prone to judgment biases.Originality/valueThis paper is the first to analyze the impact of auditors' explicit experience and knowledge about behaviorism and anchor heuristic on the anchoring and adjustment effect on audit judgment. Through a stronger awareness of cognitive biases, a professional skepticism can be enhanced.

Anchoring Effects: Resolving the Contradictions of Personality Moderator Research

Anchoring effects, that is, the attraction of numerical judgments toward a previously considered number, are among the most robust findings in social psychology. At the same time, explaining the effect and its nuances such as moderator effects has not yet been accomplished despite numerous different models of anchoring. During the past decade, personality moderators of anchoring effects have gained attention and replications of findings beyond the classical anchoring effects have been conducted. I summarize the state of personality moderator research on anchoring effects. I systematizing the eight most thoroughly investigated personality traits (Big Five, cognitive ability, cognitive reflection, and self-control) into three broad paths (exploratory, based on theories of judgment and decision making, and based on anchoring theories). Meta-analyses for each of the potential moderators revealed that there is currently no evidence of any personality moderator of anchoring. The most plausible reason for the absence of personality moderators is that individuals’ susceptibility to anchoring cannot be measured reliably. I discuss possible solutions, such as parameters derived from the anchoring and adjustment model. German Summary Ankereffekte (der Einfluss einer in Erwägung gezogenen Zahl auf nachfolgende numerische Schätzungen) gehören zu den robustesten Befunden der Sozialpsychologie. Gleichzeitig ist es bis jetzt trotz vieler Ankermodelle nicht gelungen, das Phänomen mit seinen Nuancen und Moderatoren zu erklären. Während der letzten 13 Jahre lag der Fokus der Forschung zu Ankereffekten auf den Zusammenhang zwischen der Anfälligkeit für Ankereffekte und Persönlichkeitseigenschaften. Ich fasse den Stand dieser Forschung systematisch zusammen, indem ich die acht am stärksten untersuchten Persönlichkeitseigenschaften (Big Five, Intelligenz, kognitive Reflexion, und Selbstkontrolle) in drei Forschungsprogramme (exploratorische Forschung, Forschung basierend auf Modellen des Entscheidens und Urteilen, und Forschung basierend auf Ankermodellen) zusammenfasse. Meta-Analysen für alle acht Moderatoren ergaben, dass keiner von ihnen einen mit der Anfälligkeit für Ankereffekte zusammenhängt. Der dafür plausibelste Grund ist, dass die Anfälligkeit für Ankereffekt nicht reliabel gemessen werden kann. Ich diskutiere verschiedene Lösungen für dieses Reliabilitätsproblem, wie zum Beispiel die theoriebasierte Herleitung neuer Parameter.