Accounting for Individual Differences in Decision-Making Competence: Personality and Gender Differences

Abstract

Emerging research has highlighted the utility of measuring individual differences in decision-making competence (DMC), showing that consistently following normatively rational principles is associated with positive psychosocial and health behaviors. From another level of analysis, functional theories of personality suggest that broad trait dimensions represent variation in underlying self-regulatory systems, providing a mechanistic account for robust associations between traits and similar life outcomes. Yet, the degree to which broad dispositional personality dimensions predict global tendencies to respond rationally is less understood. In a large online community sample (N = 804), we tested the associations between HEXACO personality dimensions, a 6-factor structural trait model, and a subset of DMC indicators (Applying Decision Rules, Resistance to Framing, Recognizing Social Norms, and Consistency in Risk Perception). Additionally, we examined gender differences across the DMC, first considering the potential for measurement non-invariance across groups for the DMC. We observed partial measurement invariance between men and women; only the Applying Decision Rules scale showed evidence of differential functioning across groups. Controlling for these differences, analyses revealed that higher Conscientiousness, Honesty/Humility, and Openness were associated with higher DMC scores. In contrast, Emotionality and Extraversion demonstrated gender-specific associations. Specifically, low Extraversion was associated with higher DMC scores for men, whereas higher Emotionality was associated with higher DMC scores for women. Our results suggest that traits related to self-regulatory functions of cognitive and behavioral control, and cognitive flexibility are associated with an increased tendency to engage in rational thought.

The Fatalistic Decision Maker: Time Perspective, Working Memory, and Older Adults’ Decision-Making Competence

“…Indeed, recent studies support the notion that age-related changes in motivation can affect the older adults’ effort to make decisions (Bruine de Bruine et al, 2015; Strough et al, 2015a). At this point, it is warranted to point out that even though we found support of a general DMC factor, the loadings of the individual tasks varied considerably (see also Weller et al, 2018) and the most cognitively demanding factor (Applying Decision Rules) with the highest loading on the latent facto was likely the main driver of the associations with age and Present Fatalistic.…”

“…The TP dimensions were allowed to correlate. Even though the strength of the loadings varied considerably (0.15–0.85; see also Weller et al, 2018), each of the A-DMC components showed significant loading on the DCM factor. The model showed good fit, χ 2 (23) = 23.96, χ 2 /df = 1.042, CFI = 0.998, RMSEA = 0.011.…”

“…In the first step of the data analysis, we set out to examine the extent to which the TP dimensions were (uniquely) related to a general decision-making competence factor (Weller et al, 2018). Toward this aim, we tested a model where the four individual A-DMC components loaded on a single factor with the six TP dimensions as the predictors.…”

Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors

“…A common belief is that an investor keeps in mind the risk and return characteristics of a security or stock market while making financial decisions (Antonides and Van Der Sar, 1990;Ceschi et al, 2016;Li et al, 2020), but researchers have suggested that individuals' decision-making is a complex combination of personality characteristics and demographics (Hallahan et al, 2003;Anbar and Eker, 2010;Young et al, 2012;Weller et al, 2018). We propose that individual personality characteristics like extraversion moderate the relationship between heuristic bias and risk perception and the relationship between cognitive biases and investors' irrational decision-making (Holzmeister et al, 2020).…”

The Effect of Response Inhibition Training on Risky Decision-Making Task Performance

“…From daily shopping to financial investments, people always need to make choices with limited time and information resources. Many studies have shown that people's decision-making is influenced by gender, individual characteristics, emotional states, cognitive abilities, irrelevant information, and so on (Sun et al, 2015;Stanovich, 2018;Talukdar et al, 2018;Weller et al, 2018). However, little is known about whether a simple and an operational training method can effectively affect decision-making.…”