Global–Local Incompatibility: The Misperception of Reliability in Judgment Regarding Global Variables

Abstract

A number of important decision domains, including decisions about hiring, global warming, and weather hazards, are characterized by a global-local incompatibility. These domains involve variables that cannot be observed by a single decision maker (DM) and require the integration of observations from locally available information cues. This paper presents a new bifocal lens model that describes how the structure of the environment can lead to a unique form of overconfidence when generalizing the reliability of the local environment to a global scale. When the local environment does not reliably reflect the global environment, they are incompatible. While local perspectives vary across DMs, global-local incompatibility can be understood using the structure of classical test theory as the difference between (a) perceived estimates of the reliability derived from the local environment and (b) the true reliability of the local environment. I model global-local incompatibility as the difference between the true and estimated reliability when the assumptions of classical test theory are violated. Using a series of case studies and an empirical study, I demonstrate the widespread utility of this framework, and I conclude by discussing implications for cognitive-ecological theory, risk communication, and overconfidence.

Perceiving a pandemic: Global–local incompatibility and COVID-19 superspreading events.

“…When changes in local environments reflect changes in the source of risk, then observations can be reliable indicators of larger trends. However, in all of these contexts, local experiences are different for everyone, and they may be unreliable inputs for judgments of global risk due to global–local incompatibility, a phenomenon where local observations appear reliable, but fail to generalize to larger trends (Broomell, 2020).…”

“…We test our theory of how variable local perceptions might originate and eventually lead to disagreement about risks using data from the COVID-19 pandemic. Integrating epidemiological models of disease spread (Lloyd-Smith et al, 2005) with the theory of global–local incompatibility (Broomell, 2020), we model local experiences of a pandemic, the reliability of these experiences to indicate global risks, and the collective accuracy of individual judgments of global risk (Kane & Broomell, 2020). In the following, we first review the literature modeling the spread of the COVID-19 pandemic and then present the results of two studies that investigate how superspreading shapes judgments of the pandemic.…”

“…Local infection rates likely play a large role in risk perceptions with regard to the pandemic writ large for two reasons. First, previous research suggests that beliefs and risk perceptions are malleable and reflect salient information that is locally perceivable (Broomell, 2020; Li et al, 2011). Second, personal observations provide a psychologically compelling substitute for missing information in judgment formation (Kahneman & Frederick, 2002; Li et al, 2011).…”

Looking beyond cognition for risky decision making: COVID-19, the environment, and behavior.

“…Although our perceptual systems are adapted to take advantage of many environmental contexts ( Simon, 1990 ), some environments can work against our perceptual mechanisms, creating inaccuracies, biases, and polarization ( Arkes, 1991 , Broomell, 2020a , Fiedler, 2000 , Hogarth et al, 2015 ). Indeed, Fiedler (2000) discusses how decision biases associated with probabilistic judgment can be explained by biases in small samples of instances observed from the environment.…”

“…There are many ways in which local environments can become incompatible with global risks, even when perceptions are based on ecologically valid cues. Global-local incompatibility theorizes that the natural distribution of cues across local environments can make them appear stable and reliable while simultaneously masking our perception of global risks ( Broomell, 2020a ). This creates a disconnect between the stability in what we see and changes in our personal risk that are slowly happening.…”