Deviations from optimum information-purchase strategies in human decision-making

Hershman, Ramon L.; Levine, Joseph R.

doi:10.1016/0030-5073(70)90023-1

Cited by 22 publications

(6 citation statements)

References 16 publications

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“…Although people appeared to be using a compensatory approach, they did not behave in an optimal manner (cf. Hershman & Levine, 1970;Pitz, 1968;Wendt, 1969). Mean expected points associated with the best option were unchanged or decreased rather than increased by infor mation collection.…”

Section: Discussionmentioning

confidence: 92%

“…They also ®t well with the results from the present experiments. Connolly and Gilani (1982) also pointed out that departures from optimal information collection have sometimes been found to be in the direction of over-acquisition (e.g., Hershman & Levine, 1970;Levine, Samet, & Brahlek, 1975) and sometimes in the direction of under-acquisition (e.g., Pitz, 1969;Pitz & Barrett, 1969). Various authors (e.g., Edw ards & Slovic, 1965;Pruitt, 1961) see the former as indicative of risk aversion or cautiousness and the latter as a sign of a risk-seeking or incautious approach.…”

Section: Optimizing Outcomesmentioning

confidence: 99%

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Collecting information: Optimizing outcomes, screening options, or facilitating discrimination?

Harvey

Bolger

2001

The Quarterly Journal of Experimental Psychology Section A

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Collection of information prior to a decision may be integrated into a compensatory choice process; if it is, the information packet that is collected should be the one that produces the highest net gain. Alternatively, information may be collected in order to screen out options that fail to meet minimum standards; if this is the case, people should not choose options on which they have not collected available information. We tested these and other predictions from the two approaches in four experiments. Participants were given specific information about three attributes of each choice option but only probabilistic information about a fourth one. They rated attractiveness of options, decided whether to collect specific information about the fourth attribute of each one, rated options again, and then selected one of them. Data were consistent with neither of the above approaches. Instead they suggested that people collect information in order to facilitate their ability to discriminate between the attractiveness of options.

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Section: Discussionmentioning

confidence: 92%

Section: Optimizing Outcomesmentioning

confidence: 99%

Collecting information: Optimizing outcomes, screening options, or facilitating discrimination?

Harvey

Bolger

2001

The Quarterly Journal of Experimental Psychology Section A

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“…Both types of errors are the result of sub-optimal application of stopping rules. Overacquisition and underacquisition of information have received considerable attention in the general decision making literature (e.g., Ackoff, 1967;Connolly and Gilani, 1982;Hershman and Levine, 1970;Pitz and Barrett, 1969). Overacquiring involves gathering more information than is needed, causing excessive acquisition costs.…”

Section: Introductionmentioning

confidence: 99%

Stopping rule use during information search in design problems

Browne¹,

Pitts²

2004

Organizational Behavior and Human Decision Processes

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“…The literature on information purchase (for an overview, see Connolly & Gilani, 1982;or, Connolly & Thorn, 1987) shows that people generally respond in the appropriate direction to changes in task characteristics such as the cost or diagnosticity of information. However, the magnitude of response is typically less than normative principles specify (Hershman & Levine, 1970;Fried & Peterson, 1969;Lanzetta & Kanareff, 1962;Pitz, 1968;Van Wallendael & Guignard, 1992). Relative to the prescriptions of normative principles (e.g., Edwards, 1965;Marschak, 1954;Stigler, 1961;Wendt, 1969), findings regarding the scale of acquisition are equivocal: overpurchase; underpurchase; and near optimal purchase are all observed (Hershman & Levine, 1970;Kaplan & Newman, 1966;Pruitt, 1961;Tversky & Edwards, 1966).…”

mentioning

confidence: 99%

Search strategies in decision making: the success of “success”

Newell

Rakow

Weston

et al. 2004

Behavioral Decision Making

105

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Examination of search strategies has tended to focus on choices determined by decision makers' personal preferences among relevant cues, and not on learning cue-criterion relationships. We present an empirical and rational analysis of cue search for environments with objective criteria. In such environments, cues can be evaluated on the basis of three properties: validity (the probability that a cue identifies the correct choice if cue values differ between alternatives); discrimination rate (the proportion of occasions on which a cue has differing values); and success (the expected proportion of correct choices when only that cue can be used). Our experiments show that though there is a high degree of individual variability, success is a key determinant of search. Furthermore, a rational analysis demonstrates why success-directed search is the most adaptive strategy in many circumstances. Copyright # 2004 John Wiley & Sons, Ltd. key words search strategies; heuristics; cue hierarchies, adaptive behaviors When faced with a decision it is often impossible to consider all of the options, their attributes and their potential consequences simultaneously, so we must do so sequentially. The order that we adopt to dictate this sequential search may have profound effects on our decisions and the consequences of those decisions (Hastie & Dawes, 2001). In this paper we present a new conceptualization of search in decision making in which search is dictated by the ''success'' of information in predicting the correct outcomes of decisions. Success is a function of the likelihood that a piece of information is usable and its accuracy in leading to a correct inference. We report empirical evidence showing that people's search patterns are allied to those determined by success, and a rational analysis that demonstrates the variety of circumstances in which success-directed search achieves the best outcomes.Decision making can be considered to have three component processes: information acquisition; evaluation/action; and feedback/learning (Einhorn & Hogarth, 1981;Payne, 1982). Arguably, information acquisition has received the least attention of these three aspects. Indeed, Anderson (1990) notes that the literature

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Deviations from optimum information-purchase strategies in human decision-making

Cited by 22 publications

References 16 publications

Collecting information: Optimizing outcomes, screening options, or facilitating discrimination?

Collecting information: Optimizing outcomes, screening options, or facilitating discrimination?

Stopping rule use during information search in design problems

Search strategies in decision making: the success of “success”

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