Do people make decisions under risk based on ignorance? An empirical test of the priority heuristic against cumulative prospect theory
Brandstätter, Gigerenzer, and Hertwig [Brandstätter, E., Gigerenzer, G., & Hertwig, R. (2006). The Priority Heuristic: Making choices without trade-offs. Psychological Review, 113(2), 409–432] put forward the priority heuristic (PH) as a fast and frugal heuristic for decisions under risk. Accord...
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| Vydáno v: | Organizational behavior and human decision processes Ročník 107; číslo 1; s. 75 - 95 |
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| Médium: | Journal Article |
| Jazyk: | angličtina |
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Amsterdam
Elsevier Inc
01.09.2008
Elsevier Elsevier Science Publishing Company, Inc |
| Edice: | Organizational Behavior and Human Decision Processes |
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| ISSN: | 0749-5978, 1095-9920 |
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| Abstract | Brandstätter, Gigerenzer, and Hertwig [Brandstätter, E., Gigerenzer, G., & Hertwig, R. (2006). The Priority Heuristic: Making choices without trade-offs.
Psychological Review, 113(2), 409–432] put forward the
priority heuristic (PH) as a fast and frugal heuristic for decisions under risk. According to the PH, individuals do not make trade-offs between gains and probabilities, as proposed by expected utility models such as cumulative prospect theory (CPT), but use information in a non-compensatory manner and ignore information. We conducted three studies to test the PH empirically by analyzing individual choice patterns, decision times and information search parameters in diagnostic decision tasks. Results on all three dependent variables conflict with the predictions of the PH and can be better explained by the CPT. The predictive accuracy of the PH was high for decision tasks in which the predictions align with the predictions of the CPT but very low for decision tasks in which this was not the case. The findings indicate that earlier results supporting the PH might have been caused by the selection of decision tasks that were not diagnostic for the PH as compared to CPT. |
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| AbstractList | Brandstatter, Gigerenzer, and Hertwig [Brandstatter, E., Gigerenzer, G., & Hertwig, R. (2006). The Priority Heuristic: Making choices without trade-offs. Psychological Review, 113(2), 409-432] put forward the priority heuristic (PH) as a fast and frugal heuristic for decisions under risk. According to the PH, individuals do not make trade-offs between gains and probabilities, as proposed by expected utility models such as cumulative prospect theory (CPT), but use information in a non-compensatory manner and ignore information. We conducted three studies to test the PH empirically by analyzing individual choice patterns, decision times and information search parameters in diagnostic decision tasks. Results on all three dependent variables conflict with the predictions of the PH and can be better explained by the CPT. The predictive accuracy of the PH was high for decision tasks in which the predictions align with the predictions of the CPT but very low for decision tasks in which this was not the case. The findings indicate that earlier results supporting the PH might have been caused by the selection of decision tasks that were not diagnostic for the PH as compared to CPT. [Copyright Academic Press.] Brandstätter, Gigerenzer, and Hertwig [Brandstätter, E., Gigerenzer, G., & Hertwig, R. (2006). The Priority Heuristic: Making choices without trade-offs. Psychological Review, 113(2), 409–432] put forward the priority heuristic (PH) as a fast and frugal heuristic for decisions under risk. According to the PH, individuals do not make trade-offs between gains and probabilities, as proposed by expected utility models such as cumulative prospect theory (CPT), but use information in a non-compensatory manner and ignore information. We conducted three studies to test the PH empirically by analyzing individual choice patterns, decision times and information search parameters in diagnostic decision tasks. Results on all three dependent variables conflict with the predictions of the PH and can be better explained by the CPT. The predictive accuracy of the PH was high for decision tasks in which the predictions align with the predictions of the CPT but very low for decision tasks in which this was not the case. The findings indicate that earlier results supporting the PH might have been caused by the selection of decision tasks that were not diagnostic for the PH as compared to CPT. Brandstatter, Gigerenzer, and Hertwig [Brandstatter, E., Gigerenzer, G., & Hertwig, R. (2006). The Priority Heuristic: Making choices without trade-offs. Psychological Review, 113(2), 409-432] put forward the priority heuristic (PH) as a fast and frugal heuristic for decisions under risk. According to the PH, individuals do not make trade-offs between gains and probabilities, as proposed by expected utility models such as cumulative prospect theory (CPT), but use information in a non-compensatory manner and ignore information. We conducted three studies to test the PH empirically by analyzing individual choice patterns, decision times and information search parameters in diagnostic decision tasks. Results on all three dependent variables conflict with the predictions of the PH and can be better explained by the CPT. The predictive accuracy of the PH was high for decision tasks in which the predictions align with the predictions of the CPT but very low for decision tasks in which this was not the case. The findings indicate that earlier results supporting the PH might have been caused by the selection of decision tasks that were not diagnostic for the PH as compared to CPT. All rights reserved, Elsevier Brandstatter, Gigerenzer, and Hertwig [Brandstatter, E., Gigerenzer, G., & Hertwig, R. (2006). The Priority Heuristic: Making choices without trade-offs. Psychological Review, 113(2), 409-432] put forward the priority heuristic (PH) as a fast and frugal heuristic for decisions under risk. According to the PH, individuals do not make trade-offs between gains and probabilities, as proposed by expected utility models such as cumulative prospect theory (CPT), but use information in a non-compensatory manner and ignore information. We conducted three studies to test the PH empirically by analyzing individual choice patterns, decision times and information search parameters in diagnostic decision tasks. Results on all three dependent variables conflict with the predictions of the PH and can be better explained by the CPT. The predictive accuracy of the PH was high for decision tasks in which the predictions align with the predictions of the CPT but very low for decision tasks in which this was not the case. The findings indicate that earlier results supporting the PH might have been caused by the selection of decision tasks that were not diagnostic for the PH as compared to CPT. [PUBLICATION ABSTRACT] |
| Author | Glöckner, Andreas Betsch, Tilmann |
| Author_xml | – sequence: 1 givenname: Andreas surname: Glöckner fullname: Glöckner, Andreas email: gloeckner@coll.mpg.de organization: Research Group Intuitive Experts, Max Planck Institute for Research on Collective Goods, Kurt-Schumacher Str. 10, D-53113 Bonn, Germany – sequence: 2 givenname: Tilmann surname: Betsch fullname: Betsch, Tilmann organization: Department of Psychology, University of Erfurt, Germany |
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| Keywords | Decision latency Fast and frugal heuristics Cumulative prospect theory Decision strategy Process tracing Bounded rationality Human Rational irrational Decision making Theory Heuristics Risk Experimental study Strategy |
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| SubjectTerms | Biological and medical sciences Bounded rationality Cognition. Intelligence Cumulative prospect theory Decision latency Decision making Decision making models Decision making. Choice Decision strategy Decisions Expected utility Fast and frugal heuristics Fundamental and applied biological sciences. Psychology Heuristic Heuristics Ignorance Individual behaviour Information Organizational behaviour Predictions Priorities Process tracing Prospect theory Psychology. Psychoanalysis. Psychiatry Psychology. Psychophysiology Risk theory Risks Studies Variables |
| Title | Do people make decisions under risk based on ignorance? An empirical test of the priority heuristic against cumulative prospect theory |
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