Cumulative dominance and heuristic performance in binary multi-attribute choice

Working paper 895, Department of Economics and Business, Universitat Pompeu FabraSeveral studies have reported high performance of simple decision heuristics in multi-attribute decision making. In this paper, we focus on situations where attributes are binary and analyze the performance of Deterministic-Elimination-By-Aspects (DEBA) and similar decision heuristics. We consider non-increasing weights and two probabilistic models for the attribute values: one where attribute values are independent Bernoulli randomvariables; the other one where they are binary random variables with inter-attribute positive correlations. Using these models, we show that good performance of DEBA is explained by the presence of cumulative as opposed to simple dominance. We therefore introduce the concepts of cumulative dominance compliance and fully cumulative dominance compliance and show that DEBA satisfies those properties. We derive a lower bound with which cumulative dominance compliant heuristics will choose a best alternative and show that, even with many attributes, this is not small. We also derive an upper bound for the expected loss of fully cumulative compliance heuristics and show that this is moderate even when the number of attributes is large. Both bounds are independent of the values of the weights.Postprint (author’s final draft

U.S. households' access to and use of electronic banking. 1989-2007

Nationwide surveys show that consumers are increasingly embracing technology to make payments and manage their personal finances. However, only about one in two consumers could be considered a heavy user of electronic banking. This article examines changes over time in consumers’ access to, adoption of, and attitudes toward various e-banking products and services and looks at several emerging technologies.Consumers' preferences ; Electronic funds transfers

U.S. consumers and electronic banking, 1995-2003

The availability and variety of electronic banking technologies in the marketplace has greatly expanded in recent years. For financial institutions, e-banking technologies can speed processing, reduce costs, and help attract and retain customers. For consumers, they can save time and money and may be more convenient than more traditional ways of banking. This article draws on data from two nationwide surveys to look at consumer use of such products and services as debit cards, pre-authorized debits, and computer banking, particularly as use relates to consumer demographic characteristics and consumer perceptions. ; The data show a consistent increase in the proportion of consumers using a variety of e-banking technologies. Consumer attitudes toward e-banking generally have become more positive over time, with more consumers seeing e-banking as convenient, familiar, easy to use, and secure. The use of some technologies, particularly debit cards, has become more democratized over time, but it is still the case that most e-banking technologies tend to be used by higher income, higher asset, younger, and better educated households. ; E-banking technologies hold the promise of helping families manage their money, pay their bills on time, and avoid overextending themselves with credit. To take full advantage of them, however, consumers need to become aware of the evolving array of e-banking technologies available to them and understand how different technologies fit with their financial management needs. Financial planners and consumer educators, working with both families and financial institutions, can help the promise become a reality.Electronic funds transfers ; Internet banking

Intermittent Reinforcement and the Persistence of Behavior: Experimental Evidence

Whereas economists have made extensive studies of the impact of levels of incentives on behavior, they have paid little attention to the effects of regularity and frequency of incentives. We contrasted three ways of rewarding participants in a real-effort experiment in which individuals had to decide when to exit the situation : a continuous reinforcement schedule (all periods paid) ; a fixed intermittent reinforcement schedule (one out of three periods paid) ; and a random intermittent reinforcement schedule (one out of three periods paid on a random basis). In all treatments, monetary rewards were withdrawn after the same unknown number of periods. Overall, intermittent reinforcement leads to more persistence and higher total effort, while participants in the continuous condition exit as soon as payment stops or decrease effort dramatically. Randomness increases the dispersion of effort, inducing both early exiting and persistence in behavior ; overall, it reduces agents' payoffs. Our interpretation is that, in the presence of regime shifts, both the frequency and the randomness of the reinforcement schedules influence adjustments that participants make across time to their reference points in earnings expectations. This could explain why agents persist in activities although they lose money, such as excess trading in stock markets.Intermittent reinforcement ; ambiguity ; randomness ; incentives ; experiment

In-work poverty in the East Midlands

Research that explores the nature and scale of in-work poverty in the East Midlands, using several established measures

Intermittent Reinforcement and the Persistence of Behavior: Experimental Evidence

Whereas economists have made extensive studies of the impact of levels of incentives on behavior, they have paid little attention to the effects of regularity and frequency of incentives. We contrasted three ways of rewarding participants in a real-effort experiment in which individuals had to decide when to exit the situation: a continuous reinforcement schedule (all periods paid); a fixed intermittent reinforcement schedule (one out of three periods paid); and a random intermittent reinforcement schedule (one out of three periods paid on a random basis). In all treatments, monetary rewards were withdrawn after the same unknown number of periods. Overall, intermittent reinforcement leads to more persistence and higher total effort, while participants in the continuous condition exit as soon as payment stops or decrease effort dramatically. Randomness increases the dispersion of effort, inducing both early exiting and persistence in behavior; overall, it reduces agents’ payoffs. Our interpretation is that, in the presence of regime shifts, both the frequency and the randomness of the reinforcement schedules influence adjustments that participants make across time to their reference points in earnings expectations. This could explain why agents persist in activities although they lose money, such as excess trading in stock markets.randomness, ambiguity, intermittent reinforcement, incentives, experiment

Using Adobe Flash Lite on mobile phones for psychological research: reaction time measurement reliability and inter-device variability

Mobile telephones have significant potential for use in psychological research, possessing unique characteristics—not least their ubiquity—that may make them useful tools for psychologists. We examined whether it is possible to measure reaction times (RTs) accurately using Adobe Flash Lite on mobile phones. We ran simple and choice RT experiments on two widely available mobile phones, a Nokia 6110 Navigator and a Sony Ericsson W810i, using a wireless application protocol (WAP) connection to access the Internet from the devices. RTs were compared within subjects with those obtained using a Linux-based millisecond-accurate measurement system. Results show that measured RTs were significantly longer on mobile devices, and that overall RTs and distribution of RTs varied across device

Simultaneity as an Invariant Equivalence Relation

This paper deals with the concept of simultaneity in classical and relativistic physics as construed in terms of group-invariant equivalence relations. A full examination of Newton, Galilei and Poincar\'e invariant equivalence relations in $\R^4$ is presented, which provides alternative proofs, additions and occasionally corrections of results in the literature, including Malament's theorem and some of its variants. It is argued that the interpretation of simultaneity as an invariant equivalence relation, although interesting for its own sake, does not cut in the debate concerning the conventionality of simultaneity in special relativity.Comment: Some corrections, mostly of misprints. Keywords: special relativity, simultaneity, invariant equivalence relations, Malament's theore

Ambiguous incentives and the persistence of effort: Experimental evidence

International audienceWhen the assignment of incentives is uncertain, we study how the regularity and frequency of rewards and risk attitudes influence participation and effort. We contrast three incentive schemes in a real-effort experiment in which individuals decide when to quit : a continuous incentive scheme and two intermittent ones, fixed and random. In all treatments, we introduce a regime shift by withdrawing monetary rewards after the same unknown number of periods. In such an ambiguous environment, we show that less able and more risk averse players are less persistent in effort. Intermittent incentives lead to a greater persistence of effort, while continuous incentives entail exit as soon as payment stops. Randomness increases both earlier and later exiting. This selection effect in terms of ability and risk attitudes combined with the impact of intermittent rewards on persistence lead to an increase in mean performance after the regime shift when incentives are intermittent