Do People Make Decisions Under Risk Based on Ignorance? An Empirical Test of the Priority Heuristic against Cumulative Prospect Theory

Brandstätter, Gigerenzer and Hertwig (2006) 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 predic-tions 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.Decision Strategy, Fast and Frugal Heuristics, Bounded Rationality, Decision Latency, Process Tracing, Cumulative Prospect Theory

Modeling Option and Strategy Choices with Connectionist Networks: Towards an Integrative Model of Automatic and Deliberate Decision Making

We claim that understanding human decisions requires that both automatic and deliberate processes be considered. First, we sketch the qualitative differences between two hypothetical processing systems, an automatic and a deliberate system. Second, we show the potential that connectionism offers for modeling processes of decision making and discuss some empirical evidence. Specifically, we posit that the integration of information and the application of a selection rule are governed by the automatic system. The deliberate system is assumed to be responsible for information search, inferences and the modification of the network that the automatic processes act on. Third, we critically evaluate the multiple-strategy approach to decision making. We introduce the basic assumption of an integrative approach stating that individuals apply an all-purpose rule for decisions but use different strategies for information search. Fourth, we develop a connectionist framework that explains the interaction between automatic and deliberate processes and is able to account for choices both at the option and at the strategy level.System 1, Intuition, Reasoning, Control, Routines, Connectionist Model, Parallel Constraint Satisfaction

Coherence Shifts in Probabilistic Inference Tasks

The fast-and-frugal heuristics approach to probabilistic inference assumes that individuals often employ simple heuristics to integrate cue information that commonly function in a non-reciprocal fashion. Specifically, the subjective validity of a certain cue remains stable during the application of a heuristic and is not changed by the presence or absence of another cue. The parallel-constraint-satisfaction model, in contrast, predicts that information is processed in a reciprocal fashion. Specifically, it assumes that subjective cue validities interactively af-fect each other and are modified to coherently support the favored choice. Corresponding to the model’s simulation, we predicted the direction of such coherence shifts.Cue validities were measured before, after (Exp. 1) and during judgment (Exp. 2 & 3). Coherence shifts were found in environments involving real-world cue knowledge (weather forecasts) and in a domain for which the application of fast-and-frugal heuristics has been demonstrated (city-size tasks). The results indicate that subjective cue validities are not fixed parameters, but that they are interactively changed to form coherent representations of the task.Judgment, Connectionism, Parallel Constraint Satisfaction, Fast-and-Frugal Heuristics, Adaptive Decision Making, Bounded Rationality

Do People Make Decisions Under Risk Based on Ignorance? An Empirical Test of the Priority Heuristic against Cumulative Prospect Theory

Brandstätter, Gigerenzer and Hertwig (2006) 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 b

On the Adaptive Value of Paranormal Beliefs - a Qualitative Study

Ten female and five male participants (age range 28-50 years) were recruited at esoteric fairs or via esoteric chatrooms. In a guided face-to-face interview, they reported origins and contents of their beliefs in e.g. esoteric practices, supernatural beings, rebirthing, channeling. Transcripts of the tape-recorded reports were subjected to a qualitative analysis. Exhaustive categorization of the narratives' content revealed that paranormal beliefs were functional with regard to two fundamental motives - striving for mastery and valuing me and mine (striving for a positive evaluation of the self). Moreover, paranormal beliefs paved the way for goal-setting and leading a meaningful life but, on the negative side, could also result in social exclusion. Results are discussed with reference to the adaptive value of paranormal beliefs

When prior knowledge overrules new evidence: adaptive use of decision strategies and role behavioral routines

SIGLEAvailable from Bibliothek des Instituts fuer Weltwirtschaft, ZBW, Duesternbrook Weg 120, D-24105 Kiel W 1155 (98.16) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman

Natural sampling and base-rate neglect

SIGLEAvailable from Bibliothek des Instituts fuer Weltwirtschaft, ZBW, Duesternbrook Weg 120, D-24105 Kiel W 1155 (98.05) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman

The moderating role of category salience and category focus in judgments of set size and frequency of occurence

SIGLEAvailable from Bibliothek des Instituts fuer Weltwirtschaft, ZBW, Duesternbrook Weg 120, D-24105 Kiel W 1155 (98.10) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman