Individual Differences in Need for Cognition and Decision-Making Competence among Leaders

When making decisions, people sometimes deviate from normative standards. While such deviations may appear to be alarmingly common, examining individual differences may reveal a more nuanced picture. Specifically, the personality factor of need for cognition (i.e., the extent to which people engage in and enjoy effortful cognitive activities; Cacioppo & Petty, 1982) may moderate decision makers’ susceptibility to bias, as could personality factors associated with being a leader. As part of a large-scale assessment of high-level leaders, participants completed a battery of decision-making competence and personality scales. Leaders who scored higher on need for cognition performed better on two of four components of a decision-making competence measure: framing and honoring sunk costs. In addition, the leader sample performed better than published controls. Thus, both individual differences in need for cognition and leadership experience moderate susceptibility to decision biases. Implications for broader theories of individual differences and bias are discussed

Designing IS service strategy: an information acceleration approach

Information technology-based innovation involves considerable risk that requires insight and foresight. Yet, our understanding of how managers develop the insight to support new breakthrough applications is limited and remains obscured by high levels of technical and market uncertainty. This paper applies a new experimental method based on “discrete choice analysis” and “information acceleration” to directly examine how decisions are made in a way that is behaviourally sound. The method is highly applicable to information systems researchers because it provides relative importance measures on a common scale, greater control over alternate explanations and stronger evidence of causality. The practical implications are that information acceleration reduces the levels of uncertainty and generates a more accurate rationale for IS service strategy decisions

Strategic insight and age-related goal-neglect influence risky decision-making

Maximizing long-run gains often requires taking on some degree of risk, yet decision-makers often exhibit risk aversion: RA), rejecting risky prospects even when these may have higher expected value than safer alternatives. We investigated whether explicit strategy instruction and practice can decrease prepotent RA, and whether aging impacts the efficacy of such an intervention. Participants performed a paired lottery task with options varying in risk and magnitude, both before and after practice with a similar task that encouraged maximization of expected value and instruction to use this strategy in risky decisions. In both younger and older adults, strategy training reduced RA. Although RA was age-equivalent at baseline, larger training effects were observed in younger adults. These effects were not explained by risk-related: i.e., affective) interference effects or computation ability, but were consistent with a progressive, age-related neglect of the strategy across trials. Our findings suggest that strategy training can diminish RA, but that training efficacy is reduced among older adults, in part, due to goal neglect. We discuss implications for neural mechanisms that may distinguish older and younger adults’ risky decision-making

Standard vs random dictator games: On the effects of role uncertainty and framing on generosity

This project was conducted while Ernesto Mesa-Vázquez was visiting Universidad Loyola Andalucia. He wants to particularly thank Pablo Brañas-Garza and Diego Jorrat for continued guidance and assessment with the experimental design. Álvaro Núñez-Bermúdez and the faculty members of the Economics and Business Sciences department at the University of Seville were very helpful in providing assistance for running the experiment. The paper has benefited from comments and suggestions provided by Maria Paz Espinosa, Giuseppe Attanassi, José Enrique Vila, Iván Arribas, Marco Faillo, Cristina Borra and participants at the Loyola Behavioral Lab and the Early Career Researchers in Experimental Economics Workshop (ECREEW) organized by the Red Española de Economía Experimental y del Comportamiento. Members of the ESA community were very helpful pointing out to relevant papers to our research. Special thanks to Daniel Müller, Michael Kurschilgen, Sabine Erika Kröger, Daniel Zizzo, Praveen Kujal, Paul J. Halevy, Michal Krawczyk and Matthias Greiff for their references and stimulating discussion. Finally, we acknowledge financial support from the Spanish Ministry of Economics and Competition under the project ECO2016- 75575-R (A. Urbano) and the Spanish Ministry of Science, Innovation and Universities under projects PID2019-110790RB-I00 (A. Urbano) and PGC2018-097875-A-I00 (Ismael Rodriguez-Lara); and the Generalitat Valenciana, Spain under the Excellence Program Prometeo 2019/095 (A. Urbano). Funding for open access charge: Universidad de Granada/CBUA. The usual disclaimers apply.We show that generosity is affected when we vary the level of role uncertainty, i.e., the probability that the dictator’s decision will be implemented. We also show that framing matters for generosity in that subjects are less generous when they are told that their choices will be implemented with a certain probability, compared with a setting in which they are told that their choices will not be implemented with certain probabilitySpanish Government ECO2016-75575-RSpanish Ministry of Economics and Competition PID2019-110790RB-I00 PGC2018-097875-A-I00Spanish Ministry of Science, Innovation and UniversitiesGeneralitat Valenciana 2019/095Universidad de Granada/CBU

The Strategic Use of Nudging and Behavioural Approaches in Public Health Policy during the Coronavirus Crisis

Nudging and behavioural insights need to be taken into account in strategic action planning for suppression and reduction of pandemic effects. This paper focuses on a few selected areas of significant importance to getting SAR-CoV2 under control in both the nonpharmaceutical and the pharmaceutical phase, i.e. after the development of an effective vaccine

Strategic Insight and Age-Related Goal-Neglect Influence Risky Decision-Making

Maximizing long-run gains often requires taking on some degree of risk, yet decision-makers often exhibit risk aversion (RA), rejecting risky prospects even when these have higher expected value (EV) than safer alternatives. We investigated whether explicit strategy instruction and practice can decrease prepotent RA, and whether aging impacts the efficacy of such an intervention. Participants performed a paired lottery task with options varying in risk and magnitude, both before and after practice with a similar task that encouraged maximization of EV and instruction to use this strategy in risky decisions. In both younger and older adults (OAs), strategy training reduced RA. Although RA was age-equivalent at baseline, larger training effects were observed in younger adults (YAs). These effects were not explained by risk-related (i.e., affective) interference effects or computation ability, but were consistent with a progressive, age-related neglect of the strategy across trials. Our findings suggest that strategy training can diminish RA, but that training efficacy is reduced among OAs, potentially due to goal neglect. We discuss implications for neural mechanisms that may distinguish older and YAs’ risky decision-making

Which heuristics can aid financial-decision-making?

© 2015 Elsevier Inc. We evaluate the contribution of Nobel Prize-winner Daniel Kahneman, often in association with his late co-author Amos Tversky, to the development of our understanding of financial decision-making and the evolution of behavioural finance as a school of thought within Finance. Whilst a general evaluation of the work of Kahneman would be a massive task, we constrain ourselves to a more narrow discussion of his vision of financial-decision making compared to a possible alternative advanced by Gerd Gigerenzer along with numerous co-authors. Both Kahneman and Gigerenzer agree on the centrality of heuristics in decision making. However, for Kahneman heuristics often appear as a fall back when the standard von-Neumann-Morgenstern axioms of rational decision-making do not describe investors' choices. In contrast, for Gigerenzer heuristics are simply a more effective way of evaluating choices in the rich and changing decision making environment investors must face. Gigerenzer challenges Kahneman to move beyond substantiating the presence of heuristics towards a more tangible, testable, description of their use and disposal within the ever changing decision-making environment financial agents inhabit. Here we see the emphasis placed by Gigerenzer on how context and cognition interact to form new schemata for fast and frugal reasoning as offering a productive vein of new research. We illustrate how the interaction between cognition and context already characterises much empirical research and it appears the fast and frugal reasoning perspective of Gigerenzer can provide a framework to enhance our understanding of how financial decisions are made