A Study on Outcome Framing and Risk Attitude in Engineering Decisions Under Uncertainty

Abstract

Decision making is a central activity in the design of an engineered system and has a significant impact on project outcomes. Although much research exists on engineering decision making, relatively little addresses behavioral aspects of how engineers make decisions. This is a potentially significant gap, as factors such as the way in which information is communicated and presented to engineers can matter greatly. For example, cognitive psychology has demonstrated that the choices people make can be strongly influenced by how the options are framed even when the different framings are mathematically equivalent. This paper explores the impact of framing on the types of decisions engineers face. Given engineers' intense mathematical training, it is possible that they are less susceptible to framing effects. Thus, there is motivation to determine whether relevant findings can be replicated in an engineering context. This paper presents a set of positively and negatively framed design scenarios. Consistent with prior experiments, engineers in the positive (gain) framed scenarios were more likely to choose the less risky option for three of the four scenarios. One of the scenarios did not show this bias but did include a longer time horizon which likely explains the difference. Engineers were risk neutral when the scenarios were presented negatively (loss) framed, which is in contrast to prior experiments on nonengineering populations. These results motivate the future research into the impact of framing on engineering decision making and effective guidelines on how to create engineering processes and tools that leverage or avoid inducing cognitive biases.

An investigation on using serious gaming to study human decision-making in engineering contexts

“…For example, one study found that engineers react differently to gain–loss framing effects in an engineering context than was observed in general populations in other studies (Vermillion et al. 2015). A deeper understanding of how individuals make decisions in an engineering and systems design context would support prescriptive decision-making research by yielding greater insight into undesirable biases and the prescriptions that would promote rational decision-making.…”

“…However, these results often times pertain to a certain context, e.g., consumer decisions or health-related decisions (Teare et al 1994;Shiv & Fedorikhin 1999;Riva et al 2015;Kraus & Marco 2016), and it is not immediately clear how well these results translate to engineering contexts. For example, one study found that engineers react differently to gain-loss framing effects in an engineering context than was observed in general populations in other studies (Vermillion et al 2015). A deeper understanding of how individuals make decisions in an engineering and systems design context would support prescriptive decision-making research by yielding greater insight into undesirable biases and the prescriptions that would promote rational decision-making.…”

How to Influence the Results of MCDM?—Evidence of the Impact of Cognitive Biases

“…Thus, even fields which involve technical and statistical knowledge, which could be expected to promote "rationality", are not immune to framing and loss aversion biases. Similarly, these cognitive biases have been found to influence the decision making in a variety of fields, such as management [55], medical science [9,56], finance [57,58], engineering [59,60], law [61] and others. It is therefore likely, that MCDM problems close to any of these fields might suffer from the influence of cognitive biases.…”