The Two Settings of Kind and Wicked Learning Environments

Hogarth, Robin M.; Lejarraga, Tomás; Soyer, Emre

doi:10.1177/0963721415591878

Cited by 132 publications

(76 citation statements)

References 38 publications

(40 reference statements)

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“…Theoretical Motivation for REDO How do censored environments lead to biased judgment and what can we do to nudge managers to improve their thinking? Censored environments have been classified by psychologists as a type of "wicked environment" (Hogarth et al 2015), in which judgments must be made based on systematically misrepresentative data-in this case, the average observed sales data are systematically biased below the average demand. Because individuals often do not fully adjust their beliefs to account for misrepresentative samples (e.g., Feiler et al 2013, Juslin et al 2007, Kareev et al 2002, we theorize that they will also have downwardly biased demand beliefs when faced with censored demand.…”

Section: A Remedy For the Censorship Biasmentioning

confidence: 99%

A Behavioral Remedy for the Censorship Bias

Tong

Feiler

Larrick³

2018

Production and Operations Management

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Existing evidence suggests that managers exhibit a censorship bias: demand beliefs tend to be biased low when lost sales from stockouts are unobservable (censored demand) compared to when they are observable (uncensored demand). We develop a non‐constraining, easily implementable behavioral debias technique to help mitigate this tendency in demand forecasting and inventory decision‐making settings. The debiasing technique has individuals record estimates of demand outcomes (REDO): participants explicitly record a self‐generated estimate of every demand realization, allowing them to record a different value than the number of sales in periods with stockouts. In doing so, they construct a more representative sample of demand realizations (that differs from the sales sample). In three laboratory experiments with MBA and undergraduate students, this remedy significantly reduces downward bias in demand beliefs under censorship and leads to higher inventory order decisions.

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Section: A Remedy For the Censorship Biasmentioning

confidence: 99%

A Behavioral Remedy for the Censorship Bias

Tong

Feiler

Larrick³

2018

Production and Operations Management

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“…For example, the social sampling model (Galesic, Olsson, & Rieskamp, 2012, 2018) uses the interplay between cognitive processes and social structure to unify seemingly contradictory empirical results, such as evidence supporting false consensus and false uniqueness in social judgment. With a few exceptions (e.g., see Hogarth, Lejarraga, & Soyer, 2015), the cognitive–ecological approach has focused mainly on building models and theories of cognition, with far less focus on modeling the important aspects of environments with which these cognitive models interact. Here I propose the use of classical test theory (Lord & Novick, 1968) to build a unifying framework for better understanding environments, allowing for the analysis and summary of judgment environments using tools that are already familiar to the field of psychology.…”

Section: Introductionmentioning

confidence: 99%

“…My proposed model of global–local incompatibility does not directly model cognition, but instead an incompatibility between the local environment and the true form of the global environment. Environmental characteristics define the judgment task (Dawes, 1993; Einhorn & Hogarth, 1978; Fiedler & Juslin, 2005; Fischhoff & Broomell, 2020; Hammond, Hursch, & Todd, 1964; Hogarth et al, 2015) and can limit the validity of even expert judgment (Broomell & Budescu, 2009; Hogarth, 1978; Shanteau, 1992). The environment defines (a) the amount of noise, (b) the dependencies between observations, and (c) the constraints on locally accessible information sources.…”

Section: Introductionmentioning

confidence: 99%

“…Global variables can often never be observed, providing little (or no) feedback to DMs about their past judgment accuracy. Hogarth et al (2015) label such environments as wicked, with the potential to mislead judgment. Additionally, in the absence of clear and informative feedback, effective confidence calibration is nearly impossible (Camerer, 1981; Chapman & Chapman, 1969; Fischer & Budescu, 2005; Shanteau, 1992).…”

Section: Introductionmentioning

confidence: 99%

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

Broomell

2020

Cognitive Science

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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.

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“…Third, greater generalization is in order. Different payoff conditions should be manipulated, and so should other types of conditional feedback (Elwin, 2009, p. 23) and characteristics of the learning environments (Hogarth, 2001;Hogarth, Lejarraga, & Soyer, 2015). Although our study participants were university students who appeared attentive throughout their task (performance did not drop off), it will be beneficial to replicate our finding concerning decision making in the low base rate condition in more realistic applied settings.…”

Section: Limitations and Further Researchmentioning

confidence: 99%

Detection and Selection Decisions with Conditional Feedback: Interaction of Task Uncertainty and Base Rate

Holzworth

Stewart

Mumpower

2018

Behavioral Decision Making

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Effects of task uncertainty on decision thresholds in a multiple cue decision task were examined under two types of feedback and three base rate conditions. In most such decision experiments, participants receive feedback after every trial (full feedback) with a single (usually .5) base rate. Our experiment explored conditional (decision-contingent) feedback, in a task representing a detection problem (passenger screening) in which the decision maker receives no feedback unless the decision is positive (search the passenger). Increased uncertainty made all dependent measures worse. Task uncertainty had detrimental effects on both judgment and decision making, and interacted with effects of feedback and base rate. Decision performance was better with full feedback than with conditional feedback, but not by much. There may be no single unifying explanation for results of our base rate manipulation. Conditional feedback generally resulted in fewer positive decisions than full feedback, but not in the low (.1) base rate condition. Results provide partial support for constructivist encoding and for accuracy maximization with moderate and high base rates, but not with a low base rate. Our results indicated lower selection rates with conditional feedback compared with full feedback in moderate and high base rate conditions, and a more exploratory strategy with higher selection rates with conditional feedback compared with full feedback when base rate was low.

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The Two Settings of Kind and Wicked Learning Environments

Cited by 132 publications

References 38 publications

A Behavioral Remedy for the Censorship Bias

A Behavioral Remedy for the Censorship Bias

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

Detection and Selection Decisions with Conditional Feedback: Interaction of Task Uncertainty and Base Rate

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