rvenkat + judgment_decision-making   93

The Loss of Loss Aversion: Will It Loom Larger Than Its Gain? - Gal - 2018 - Journal of Consumer Psychology - Wiley Online Library
Loss aversion, the principle that losses loom larger than gains, is among the most widely accepted ideas in the social sciences. The first part of this article introduces and discusses the construct of loss aversion. The second part of this article reviews evidence in support of loss aversion. The upshot of this review is that current evidence does not support that losses, on balance, tend to be any more impactful than gains. The third part of this article aims to address the question of why acceptance of loss aversion as a general principle remains pervasive and persistent among social scientists, including consumer psychologists, despite evidence to the contrary. This analysis aims to connect the persistence of a belief in loss aversion to more general ideas about belief acceptance and persistence in science. The final part of the article discusses how a more contextualized perspective of the relative impact of losses versus gains can open new areas of inquiry that are squarely in the domain of consumer psychology.

--See additional references here

--First, hot-hand-fallacy fallacy; then, loss of loss aversion; now what? Time to rework my syllabus (Wonder what's the status of conjunction fallacy?)

-- Also, someone should inform this field of *quantum cognition*

of these developments.
judgment_decision-making  dmce  teaching  via:gelman 
12 weeks ago by rvenkat
Emotional Arousal Predicts Voting on the U.S. Supreme Court | Political Analysis | Cambridge Core
Do judges telegraph their preferences during oral arguments? Using the U.S. Supreme Court as our example, we demonstrate that Justices implicitly reveal their leanings during oral arguments, even before arguments and deliberations have concluded. Specifically, we extract the emotional content of over 3,000 hours of audio recordings spanning 30 years of oral arguments before the Court. We then use the level of emotional arousal, as measured by vocal pitch, in each of the Justices’ voices during these arguments to accurately predict many of their eventual votes on these cases. Our approach yields predictions that are statistically and practically significant and robust to including a range of controls; in turn, this suggests that subconscious vocal inflections carry information that legal, political, and textual information do not.

-- easily replicable work, I am curious if their results would survive though.
heuristics  judgment_decision-making  us_supreme_court 
december 2018 by rvenkat
Social Influence Bias: A Randomized Experiment | Science
Our society is increasingly relying on the digitized, aggregated opinions of others to make decisions. We therefore designed and analyzed a large-scale randomized experiment on a social news aggregation Web site to investigate whether knowledge of such aggregates distorts decision-making. Prior ratings created significant bias in individual rating behavior, and positive and negative social influences created asymmetric herding effects. Whereas negative social influence inspired users to correct manipulated ratings, positive social influence increased the likelihood of positive ratings by 32% and created accumulating positive herding that increased final ratings by 25% on average. This positive herding was topic-dependent and affected by whether individuals were viewing the opinions of friends or enemies. A mixture of changing opinion and greater turnout under both manipulations together with a natural tendency to up-vote on the site combined to create the herding effects. Such findings will help interpret collective judgment accurately and avoid social influence bias in collective intelligence in the future.
crowd_sourcing  judgment_decision-making  social_influence  social_networks  teaching  online_experiments  sinan.aral 
november 2018 by rvenkat
They saw a game; a case study
When the Dartmouth football team played Princeton in 1951, much controversy was generated over what actually took place during the game. Basically, there was disagreement between the two schools as to what had happened during the game. A questionnaire designed to get reactions to the game and to learn something of the climate of opinion was administered at each school and the same motion picture of the game was shown to a sample of undergraduate at each school, followed by another questionnnaire. Results indicate that the "game" was actually many different games and that each version of the events that transpired was just as "real" to a particular person as other versions were to other people.

groups  judgment_decision-making  collective_cognition  cultural_cognition  dmce  teaching  via:nyhan 
november 2018 by rvenkat
Fake images: The effects of source, intermediary, and digital media literacy on contextual assessment of image credibility online - Cuihua Shen, Mona Kasra, Wenjing Pan, Grace A Bassett, Yining Malloch, James F O’Brien, 2018
Fake or manipulated images propagated through the Web and social media have the capacity to deceive, emotionally distress, and influence public opinions and actions. Yet few studies have examined how individuals evaluate the authenticity of images that accompany online stories. This article details a 6-batch large-scale online experiment using Amazon Mechanical Turk that probes how people evaluate image credibility across online platforms. In each batch, participants were randomly assigned to 1 of 28 news-source mockups featuring a forged image, and they evaluated the credibility of the images based on several features. We found that participants’ Internet skills, photo-editing experience, and social media use were significant predictors of image credibility evaluation, while most social and heuristic cues of online credibility (e.g. source trustworthiness, bandwagon, intermediary trustworthiness) had no significant impact. Viewers’ attitude toward a depicted issue also positively influenced their credibility evaluation.
media_studies  misinformation  disinformation  online_experiments  amazon_turk  judgment_decision-making  political_psychology  via:nyhan 
october 2018 by rvenkat
Does Machine Learning Automate Moral Hazard and Error?
Machine learning tools are beginning to be deployed en masse in health care. While the statistical underpinnings of these techniques have been questioned with regard to causality and stability, we highlight a different concern here, relating to measurement issues. A characteristic feature of health data, unlike other applications of machine learning, is that neither y nor x is measured perfectly. Far from a minor nuance, this can undermine the power of machine learning algorithms to drive change in the health care system--and indeed, can cause them to reproduce and even magnify existing errors in human judgment.
machine_learning  statistics  prediction  judgment_decision-making  human-machine_error  for_friends 
march 2018 by rvenkat
The social dilemma of autonomous vehicles | Science
Autonomous vehicles (AVs) should reduce traffic accidents, but they will sometimes have to choose between two evils, such as running over pedestrians or sacrificing themselves and their passenger to save the pedestrians. Defining the algorithms that will help AVs make these moral decisions is a formidable challenge. We found that participants in six Amazon Mechanical Turk studies approved of utilitarian AVs (that is, AVs that sacrifice their passengers for the greater good) and would like others to buy them, but they would themselves prefer to ride in AVs that protect their passengers at all costs. The study participants disapprove of enforcing utilitarian regulations for AVs and would be less willing to buy such an AV. Accordingly, regulating for utilitarian algorithms may paradoxically increase casualties by postponing the adoption of a safer technology.

--also add Greene's commentary (same issue)
moral_psychology  artificial_intelligence  judgment_decision-making  dmce  teaching 
february 2018 by rvenkat
Demographically diverse crowds are typically not much wiser than homogeneous crowds | Proceedings of the National Academy of Sciences
Averaging independent numerical judgments can be more accurate than the average individual judgment. This “wisdom of crowds” effect has been shown with large, diverse samples, but the layperson wishing to take advantage of this may only have access to the opinions of a small, more demographically homogeneous “convenience sample.” How wise are homogeneous crowds relative to diverse crowds? In simulations and survey studies, we demonstrate three necessary conditions under which small socially diverse crowds can outperform socially homogeneous crowds: Social identity must predict judgment, the effect of social identity on judgment must be at least moderate in size, and the average estimates of the social groups in question must “bracket” the truth being judged. Seven survey studies suggest that these conditions are rarely met in real judgment tasks. Comparisons between the performances of diverse and homogeneous crowds further confirm that social diversity can make crowds wiser but typically by a very small margin.
democracy  collective_cognition  judgment_decision-making  dmce  teaching 
february 2018 by rvenkat
Forming Beliefs: Why Valence Matters - ScienceDirect
One of the most salient attributes of information is valence: whether a piece of news is good or bad. Contrary to classic learning theories, which implicitly assume beliefs are adjusted similarly regardless of valence, we review evidence suggesting that different rules and mechanisms underlie learning from desirable and undesirable information. For self-relevant beliefs this asymmetry generates a positive bias, with significant implications for individuals and society. We discuss the boundaries of this asymmetry, characterize the neural system supporting it, and describe how changes in this circuit are related to individual differences in behavior.
cognitive_science  neuroscience  judgment_decision-making  dmce  teaching 
january 2018 by rvenkat
Critical Thinking - Statistical Reasoning and Intuitive Judgment | Columbia University Press
Life is fundamentally uncertain. We do not know whether it will rain, whether the market will go up or down, whether our unhealthy eating choices will have serious consequences, or whether terrorists will strike our city. To make matters worse, we also lack a tried and true procedure for evaluating the likelihood of such events. Yet we are required to make decisions great and small that depend on these events. In the absence of certainty or an objective procedure for estimating probabilities, we must rely on our own reasoning, which a great deal of research has shown to be less rational than we would like to believe.

In Critical Thinking, Varda Liberman and Amos Tversky examine how we make judgments under uncertainty and explain how various biases can distort our consideration of evidence. Using everyday examples, they detail how to examine data and their implications with the goal of helping readers improve their intuitive reasoning and judgment. From the courtroom to the basketball court, cholesterol count to the existence of the supernatural, Liberman and Tversky explore the fundamental insights of probability, causal relationships, and making inferences from samples. They delve into the psychology of judgment, explaining why first impressions are often wrong and correct answers go against our intuitions. Originally written in Hebrew and published by the Open University in 1996, Critical Thinking is an essential guide for students and interested readers alike that teaches us to become more critical readers and consumers of information.
history_of_ideas  statistics  judgment_decision-making  heuristics  dmce  teaching  book 
january 2018 by rvenkat
Growing Outrage by Cass Sunstein :: SSRN
Why and when does outrage grow? This essay explores two potential answers. The first points to a revision or weakening of social norms, which leads people to express outrage that they had previously suppressed. The second points to a revision or weakening of social norms, which leads people to express outrage that they had not previously felt (and may or may not now feel). The intensity of outrage is often a product of what is most salient. It is also a product of “normalization”; people compare apparently outrageous behavior to behavior falling in the same category in which it is observed, and do not compare it to other cases, which leads to predictable incoherence in judgments. These points bear on the #MeToo movement of 2017 and 2018 and the rise and fall (and rise again, and fall again) of discrimination on the basis of sex and race (and also religion and ethnicity).
social_movements  norms  dynamics  moral_panic  virtue_signaling  political_economy  heuristics  judgment_decision-making  dmce  teaching 
january 2018 by rvenkat
Shared Outrage and Erratic Awards: The Psychology of Punitive Damages | SpringerLink
An experimental study of punitive damage awards in personal injury cases was conducted, using jury-eligible respondents. There was substantial consensus on judgments of the outrageousness of a defendant's actions and of the appropriate severity of punishment. Judgments of dollar awards made by individuals and synthetic juries were much more erratic. These results are familiar characteristics of judgments made on unbounded magnitude scales. The degree of harm suffered by the plaintiff and the size of the firm had a pronounced effect on awards. Some judgmental tasks are far easier than others for juries to perform, and reform possibilities should exploit this fact.


-- use synthetic jury studies to model public opinion?
judgment_decision-making  empirical_legal_studies  law  dmce  teaching  models_of_behavior  moral_psychology  cass.sunstein 
december 2017 by rvenkat
Death by Pokémon GO by Mara Faccio, John McConnell :: SSRN
Based on detailed police accident reports for Tippecanoe County, Indiana, and using the introduction of the virtual reality game Pokémon GO as a natural experiment, we document a disproportionate increase in vehicular crashes and associated vehicular damage, personal injuries, and fatalities in the vicinity of locations, called PokéStops, where users can play the game while driving. The results are robust to using points of play, called Gyms, that cannot be used to play the game while driving as a placebo. We estimate the total incremental county-wide cost of users playing Pokémon GO while driving, including the value of the two incremental human lives lost, to be in the range of $5.2 million to $25.5 million over only the 148 days following the introduction of the game. Extrapolation of these estimates to nation-wide levels yields a total ranging from $2 to $7.3 billion for the same period.

**Two things**

-- an example of inattentional blindness?
-- an example of the use of integration geo-spatial tagging with actual geography of accidents
spatio-temporal_statistics  causal_inference  judgment_decision-making  dmce  teaching  via:dynarski 
november 2017 by rvenkat
Now out of Never: The Element of Surprise in the East European Revolution of 1989 | World Politics | Cambridge Core
Like many major revolutions in history, the East European Revolution of 1989 caught its leaders, participants, victims, and observers by surprise. This paper offers an explanation whose crucial feature is a distinction between private and public preferences. By suppressing their antipathies to the political status quo, the East Europeans misled everyone, including themselves, as to the possibility of a successful uprising. In effect, they conferred on their privately despised governments an aura of invincibility. Under the circumstances, public opposition was poised to grow explosively if ever enough people lost their fear of exposing their private preferences. The currently popular theories of revolution do not make clear why uprisings easily explained in retrospect may not have been anticipated. The theory developed here fills this void. Among its predictions is that political revolutions will inevitably continue to catch the world by surprise.
european_politics  revolutions  20th_century  social_behavior  contagion  homophily  ?  social_psychology  institutions  norms  collective_dynamics  judgment_decision-making  dmce  teaching  timur.kuran 
october 2017 by rvenkat
Private Truths, Public Lies — Timur Kuran | Harvard University Press
Preference falsification, according to the economist Timur Kuran, is the act of misrepresenting one’s wants under perceived social pressures. It happens frequently in everyday life, such as when we tell the host of a dinner party that we are enjoying the food when we actually find it bland. In Private Truths, Public Lies, Kuran argues convincingly that the phenomenon not only is ubiquitous but has huge social and political consequences. Drawing on diverse intellectual traditions, including those rooted in economics, psychology, sociology, and political science, Kuran provides a unified theory of how preference falsification shapes collective decisions, orients structural change, sustains social stability, distorts human knowledge, and conceals political possibilities.

A common effect of preference falsification is the preservation of widely disliked structures. Another is the conferment of an aura of stability on structures vulnerable to sudden collapse. When the support of a policy, tradition, or regime is largely contrived, a minor event may activate a bandwagon that generates massive yet unanticipated change.

In distorting public opinion, preference falsification also corrupts public discourse and, hence, human knowledge. So structures held in place by preference falsification may, if the condition lasts long enough, achieve increasingly genuine acceptance. The book demonstrates how human knowledge and social structures co-evolve in complex and imperfectly predictable ways, without any guarantee of social efficiency.

Private Truths, Public Lies uses its theoretical argument to illuminate an array of puzzling social phenomena. They include the unexpected fall of communism, the paucity, until recently, of open opposition to affirmative action in the United States, and the durability of the beliefs that have sustained India’s caste system
book  social_behavior  contagion  homophily  ?  social_psychology  institutions  norms  collective_dynamics  judgment_decision-making  dmce  teaching  timur.kuran 
october 2017 by rvenkat
Science Denial Across the Political DivideSocial Psychological and Personality Science - Anthony N. Washburn, Linda J. Skitka, 2017
We tested whether conservatives and liberals are similarly or differentially likely to deny scientific claims that conflict with their preferred conclusions. Participants were randomly assigned to read about a study with correct results that were either consistent or inconsistent with their attitude about one of several issues (e.g., carbon emissions). Participants were asked to interpret numerical results and decide what the study concluded. After being informed of the correct interpretation, participants rated how much they agreed with, found knowledgeable, and trusted the researchers’ correct interpretation. Both liberals and conservatives engaged in motivated interpretation of study results and denied the correct interpretation of those results when that interpretation conflicted with their attitudes. Our study suggests that the same motivational processes underlie differences in the political priorities of those on the left and the right.
cultural_cognition  political_psychology  public_opinion  judgment_decision-making  dmce  teaching 
september 2017 by rvenkat
Can Robots Be Lawyers? Computers, Lawyers, and the Practice of Law by Dana Remus, Frank S. Levy :: SSRN
We assess frequently-advanced arguments that automation will soon replace much of the work currently performed by lawyers. Our assessment addresses three core weaknesses in the existing literature: (i) a failure to engage with technical details to appreciate the capacities and limits of existing and emerging software; (ii) an absence of data on how lawyers divide their time among various tasks, only some of which can be automated; and (iii) inadequate consideration of whether algorithmic performance of a task conforms to the values, ideals and challenges of the legal profession.

Combining a detailed technical analysis with a unique data set on time allocation in large law firms, we estimate that automation has an impact on the demand for lawyers’ time that while measureable, is far less significant than popular accounts suggest. We then argue that the existing literature’s narrow focus on employment effects should be broadened to include the many ways in which computers are changing (as opposed to replacing) the work of lawyers. We show that the relevant evaluative and normative inquiries must begin with the ways in which computers perform various lawyering tasks differently than humans. These differences inform the desirability of automating various aspects of legal practice, while also shedding light on the core values of legal professionalism.
automation  algorithms  artificial_intelligence  judgment_decision-making  law  labor  technology 
september 2017 by rvenkat
The strategic moral self: Self-presentation shapes moral dilemma judgments
Research has focused on the cognitive and affective processes underpinning dilemma judgments where causing harm maximizes outcomes. Yet, recent work indicates that lay perceivers infer the processes behind others' judgments, raising two new questions: whether decision-makers accurately anticipate the inferences perceivers draw from their judgments (i.e., meta-insight), and, whether decision-makers strategically modify judgments to present themselves favorably. Across seven studies, a) people correctly anticipated how their dilemma judgments would influence perceivers' ratings of their warmth and competence, though self-ratings differed (Studies 1–3), b) people strategically shifted public (but not private) dilemma judgments to present themselves as warm or competent depending on which traits the situation favored (Studies 4–6), and, c) self-presentation strategies augmented perceptions of the weaker trait implied by their judgment (Study 7). These results suggest that moral dilemma judgments arise out of more than just basic cognitive and affective processes; complex social considerations causally contribute to dilemma decision-making.
moral_psychology  virtue_signaling  moral_values  judgment_decision-making  dmce  teaching 
september 2017 by rvenkat
Significant social change often comes from the unleashing of hidden preferences; it also comes from the construction of novel preferences. Under the pressure of social norms, people sometimes falsify their preferences. They do not feel free to say or do as they wish. Once norms are weakened or revised, through private efforts or law, it becomes possible to discover preexisting preferences. Because those preferences existed but were concealed, large-scale movements are both possible and exceedingly difficult to predict; they are often startling. But revisions of norms can also construct rather than uncover preferences. Once norms are altered, again through private efforts or law, people come to hold preferences that they did not hold before. Nothing has been unleashed. These points bear on the rise and fall (and rise again, and fall again) of discrimination on the basis of sex and race (and also religion and ethnicity). They also help illuminate the dynamics of social cascades and the effects of social norms on diverse practices and developments, including smoking, drinking, police brutality, protest activity, veganism, drug use, crime, white nationalism, “ethnification,” considerateness, and the public expression of religious beliefs.
social_behavior  contagion  homophily  ?  social_psychology  institutions  norms  collective_dynamics  cass.sunstein  judgment_decision-making  dmce  teaching 
august 2017 by rvenkat
Rationally Inattentive Behavior: Characterizing and Generalizing Shannon Entropy
We provide a full behavioral characterization of the standard Shannon model of rational inattention. The key axiom is "Invariance under Compression", which identifies this model as capturing an ideal form of attention-constrained choice. We introduce tractable generalizations that allow for many of the known behavioral violations from this ideal, including asymmetries and complementarities in learning, context effects, and low responsiveness to incentives. We provide an even more general method of recovering attention costs from behavioral data. The data set in which we characterize all behavioral patterns is "state dependent" stochastic choice data.
economics  information_theory  heuristics  judgment_decision-making  dmce  teaching  ?  nber 
august 2017 by rvenkat
The Negative Effect Fallacy: A Case Study of Incorrect Statistical Reasoning by Federal Courts - Enos - 2017 - Journal of Empirical Legal Studies - Wiley Online Library
This article examines the negative effect fallacy, a flawed statistical argument first utilized by the Warren Court in Elkins v. United States. The Court argued that empirical evidence could not determine whether the exclusionary rule prevents future illegal searches and seizures because “it is never easy to prove a negative,” inappropriately conflating the philosophical and arithmetic definitions of the word negative. Subsequently, the Court has repeated this mistake in other domains, including free speech, voting rights, and campaign finance. The fallacy has also proliferated into the federal circuit and district court levels. Narrowly, our investigation aims to eradicate the use of the negative effect fallacy in federal courts. More broadly, we highlight several challenges and concerns with the increasing use of statistical reasoning in court decisions. As courts continue to evaluate statistical and empirical questions, we recommend that they evaluate the evidence on its own merit rather than relying on convenient arguments embedded in precedent.
us_supreme_court  statistics  empirical_legal_studies  judgment_decision-making  public_administration  regulation  governance  via:gelman 
august 2017 by rvenkat
The Belief in a Favorable FuturePsychological Science - Todd Rogers, Don A. Moore, Michael I. Norton, 2017
People believe that future others’ preferences and beliefs will change to align with their own. People holding a particular view (e.g., support of President Trump) are more likely to believe that future others will share their view than to believe that future others will have an opposing view (e.g., opposition to President Trump). Six studies demonstrated this belief in a favorable future (BFF) for political views, scientific beliefs, and entertainment and product preferences. BFF is greater in magnitude than the tendency to believe that current others share one’s views (false-consensus effect), arises across cultures, is distinct from general optimism, is strongest when people perceive their views as being objective rather than subjective, and can affect (but is distinct from) beliefs about favorable future policy changes. A lab experiment involving monetary bets on the future popularity of politicians and a field experiment involving political donations (N = 660,542) demonstrated that BFF can influence people’s behavior today.
prediction  judgment_decision-making  heuristics  the_civilizing_process  critique  ?  teaching  moral_values  human_progress 
august 2017 by rvenkat
The intrinsic value of choice: The propensity to under-delegate in the face of potential gains and losses | SpringerLink
Human beings are often faced with a pervasive problem: whether to make their own decision or to delegate the decision task to someone else. Here, we test whether people are inclined to forgo monetary rewards in order to retain agency when faced with choices that could lead to losses and gains. In a simple choice task, we show that participants choose to pay in order to control their own payoff more than they should if they were to maximize monetary rewards and minimize monetary losses. This tendency cannot be explained by participants’ overconfidence in their own ability, as their perceived ability was elicited and accounted for. Nor can the results be explained by lack of information. Rather, the results seem to reflect an intrinsic value for choice, which emerges in the domain of both gains and of losses. Moreover, our data indicate that participants are aware that they are making suboptimal choices in the normative sense, but do so anyway, presumably for psychological gains.
judgment_decision-making  heuristics  policy  ?  dmce  teaching  cass.sunstein 
august 2017 by rvenkat
Revealed Preference Analysis with Framing Effects - Working Paper - Stanford Law School
In many settings, preference-irrelevant frames can affect what people choose. We develop a revealed preference approach for recovering ordinal preference information from choice data when such framing effects are present. Plausible restrictions of varying strength permit either partial- or point-identification of
preferences for the decision-makers who choose consistently across frames. Recovering population preferences requires understanding the empirical relationship between decision-makers’ preferences and their sensitivity to the frame. We develop tools for studying this relationship and illustrate them with data on automatic enrollment into pension plans.
judgment_decision-making  preference_construction  framing_effects  observational_studies  dmce  teaching 
june 2017 by rvenkat
A Bottom-Up Theory of Public Opinion about Foreign Policy - Kertzer - 2017 - American Journal of Political Science - Wiley Online Library
f public opinion about foreign policy is such an elite-driven process, why does the public often disagree with what elites have to say? We argue here that elite cue-taking models in International Relations are both overly pessimistic and unnecessarily restrictive. Members of the public may lack information about the world around them, but they do not lack principles, and information need not only cascade from the top down. We present the results from five survey experiments where we show that cues from social peers are at least as strong as those from political elites. Our theory and results build on a growing number of findings that individuals are embedded in a social context that combines with their general orientations toward foreign policy in shaping responses toward the world around them. Thus, we suggest the public is perhaps better equipped for espousing judgments in foreign affairs than many of our top-down models claim.
opinion_formation  public_opinion  judgment_decision-making  political_psychology  political_science  dmce  teaching  via:nyhan 
june 2017 by rvenkat
Assessing the Breadth of Framing Effects
Issue frames are a central concept in studying public opinion, and are thought to operate by foregrounding related considerations in citizens' minds. But scholarship has yet to consider the breadth of framing effects by testing whether frames influence attitudes beyond the specific issue they highlight. For example, does a discussion of terrorism affect opinions on proximate issues like crime or even more remote issues like poverty? By measuring the breadth of framing effects, we can assess the extent to which citizens' political considerations are cognitively organized by issues. We undertake a population-based survey experiment with roughly 3,300 respondents which includes frames related to terrorism, crime, health care, and government spending. The results demonstrate that framing effects are narrow, with limited but discernible spillover on proximate, structurally similar issues. Discrete issues not only organize elite politics but also exist in voters' minds, a finding with implications for studying ideology as well as framing.
political_science  public_opinion  ideology  heuristics  judgment_decision-making  dmce  teaching  via:nyhan 
may 2017 by rvenkat
Cyclical Population Dynamics of Automatic Versus Controlled Processing: An Evolutionary Pendulum by David G. Rand, Damon Tomlin, Adam Bear, Elliott A. Ludvig, Jonathan D. Cohen :: SSRN
Psychologists, neuroscientists, and economists often conceptualize decisions as arising from processes that lie along a continuum from automatic (i.e., “hardwired” or over-learned, but relatively inflexible) to controlled (less efficient and effortful, but more flexible). Control is central to human cognition, and plays a key role in our ability to modify the world to suit our needs. Given its advantages, reliance on controlled processing may seem predestined to increase within the population over time. Here, we examine whether this is so by introducing an evolutionary game theoretic model of agents that vary in their use of automatic versus controlled processes, and in which cognitive processing modifies the environment in which the agents interact. We find that, under a wide range of parameters and model assumptions, cycles emerge in which the prevalence of each type of processing in the population oscillates between two extremes. Rather than inexorably increasing, the emergence of control often creates conditions that lead to its own demise by allowing automaticity to also flourish, thereby undermining the progress made by the initial emergence of controlled processing. We speculate that this observation may have relevance for understanding similar cycles across human history, and may lend insight into some of the circumstances and challenges currently faced by our species.
evolutionary_biology  game_theory  computational_social_science  judgment_decision-making  via:strogatz 
may 2017 by rvenkat
Sacred versus Pseudo-sacred Values: How People Cope with Taboo Trade-Offs
Psychologists have documented widespread public deference to "sacred values" that communities, formally or informally, exempt from tradeoffs with secular limits, like money. This work has, however, been largely confined to low-stakes settings. As the stakes rise, deference must decline because people can't write blank checks for every "sacred" cause. Shadow pricing is inevitable which sets the stage for political blame-games of varying sophistication. In a rational world, citizens would accept the necessity of such tradeoffs, but the attraction to moral absolutes is strong--perhaps even essential for social cohesion.
moral_psychology  taboo-_trade-offs  judgment_decision-making  cultural_cognition  philip.tetlock  dmce  teaching 
may 2017 by rvenkat
[1702.04690] Simple rules for complex decisions
From doctors diagnosing patients to judges setting bail, experts often base their decisions on experience and intuition rather than on statistical models. While understandable, relying on intuition over models has often been found to result in inferior outcomes. Here we present a new method, select-regress-and-round, for constructing simple rules that perform well for complex decisions. These rules take the form of a weighted checklist, can be applied mentally, and nonetheless rival the performance of modern machine learning algorithms. Our method for creating these rules is itself simple, and can be carried out by practitioners with basic statistics knowledge. We demonstrate this technique with a detailed case study of judicial decisions to release or detain defendants while they await trial. In this application, as in many policy settings, the effects of proposed decision rules cannot be directly observed from historical data: if a rule recommends releasing a defendant that the judge in reality detained, we do not observe what would have happened under the proposed action. We address this key counterfactual estimation problem by drawing on tools from causal inference. We find that simple rules significantly outperform judges and are on par with decisions derived from random forests trained on all available features. Generalizing to 22 varied decision-making domains, we find this basic result replicates. We conclude with an analytical framework that helps explain why these simple decision rules perform as well as they do.
heuristics  machine_learning  prediction  expert_judgment  judgment_decision-making  dmce  teaching  via:duncan.watts 
april 2017 by rvenkat
Political Partisan Bias in Mutual Fund Portfolios by M. Babajide Wintoki, Yaoyi Xi :: SSRN
We present evidence that mutual fund managers are more likely to allocate assets to firms managed by executives and directors with whom they share a similar political partisan affiliation. We find that this bias is not associated with improved fund performance, suggesting that it is not due to superior information. Funds with more partisan bias suffer from higher levels of idiosyncratic volatility than those with less bias. Partisan bias is more evident when the fund manager is less experienced, in firms with more opaque information environments, and when the President of the U.S. comes from the fund manager’s own party.
partyism  us_politics  polarization  ideology  expert_judgment  judgment_decision-making  dmce  teaching 
april 2017 by rvenkat
Peer Effects on the United States Supreme Court by Richard Holden, Michael Keane, Matthew Lilley :: SSRN
Using data on essentially every US Supreme Court decision since 1946, we estimate a model of peer effects on the Court. We consider both the impact of justice ideology and justice votes on the votes of their peers. To identify these peer effects we use two instruments. The first is based on the composition of the Court, determined by which justices sit on which cases due to recusals or health reasons for not sitting. The second utilizes the fact that many justices previously sat on Federal Circuit Courts and are empirically much more likely to affirm decisions from their “home” court. We find large peer effects. Replacing a single justice with one who votes in a conservative direction 10 percentage points more frequently increases the probability that each other justice votes conservative by 1.63 percentage points. In terms of votes, a 10 percentage point increase in the probability that a single justice votes conservative leads to a 1.1 percentage increase in the probability that each other justice votes conservative. Finally, a single justice becoming 10% more likely to vote conservative increases the share of cases with a conservative outcome by 3.6 percentage points – excluding the direct effect of that justice – and reduces the share with a liberal outcome by 3.2 percentage points. In general, the indirect effect of a justice’s vote on the outcome through the votes of their peers is typically several times larger than the direct mechanical effect of the justice’s own vote.

-- a dilute version here

-- a related paper here
empirical_legal_studies  us_supreme_court  influence  homophily  groups  judgment_decision-making  dmce  teaching  political_science  political_economy  collective_cognition  causal_inference  via:wolfers 
april 2017 by rvenkat
Is Deontology a Heuristic? On Psychology, Neuroscience, Ethics, and Law by Cass R. Sunstein :: SSRN
A growing body of psychological and neuroscientific research links dual-process theories of cognition with moral reasoning (and implicitly to legal reasoning as well). The relevant research appears to show that at least some deontological judgments are connected with rapid, automatic, emotional processing, and that consequentialist judgments (including utilitarianism) are connected with slower, more deliberative thinking. These findings are consistent with the claim that deontological thinking is best understood as a moral heuristic – one that generally works well, but that also misfires. If this claim is right, it may have large implications for many debates in politics, morality, and law, including those involving the role of retribution, the free speech principle, religious liberty, the idea of fairness, and the legitimacy of cost-benefit analysis. Nonetheless, psychological and neuroscientific research cannot rule out the possibility that consequentialism is wrong and that deontology is right. It tells us about the psychology of moral and legal judgment, but it does no more. On the largest questions, it leaves moral and legal debates essentially as they were before.
cass.sunstein  moral_psychology  heuristics  judgment_decision-making  moral_philosophy  dmce  teaching  review 
march 2017 by rvenkat
Akerlof, G.A. and Shiller, R.J.: Phishing for Phools: The Economics of Manipulation and Deception. (eBook, Paperback and Hardcover)
Ever since Adam Smith, the central teaching of economics has been that free markets provide us with material well-being, as if by an invisible hand. In Phishing for Phools, Nobel Prize–winning economists George Akerlof and Robert Shiller deliver a fundamental challenge to this insight, arguing that markets harm as well as help us. As long as there is profit to be made, sellers will systematically exploit our psychological weaknesses and our ignorance through manipulation and deception. Rather than being essentially benign and always creating the greater good, markets are inherently filled with tricks and traps and will "phish" us as "phools."

Phishing for Phools therefore strikes a radically new direction in economics, based on the intuitive idea that markets both give and take away. Akerlof and Shiller bring this idea to life through dozens of stories that show how phishing affects everyone, in almost every walk of life. We spend our money up to the limit, and then worry about how to pay the next month's bills. The financial system soars, then crashes. We are attracted, more than we know, by advertising. Our political system is distorted by money. We pay too much for gym memberships, cars, houses, and credit cards. Drug companies ingeniously market pharmaceuticals that do us little good, and sometimes are downright dangerous.

Phishing for Phools explores the central role of manipulation and deception in fascinating detail in each of these areas and many more. It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation. At the same time, the book tells stories of individuals who have stood against economic trickery—and how it can be reduced through greater knowledge, reform, and regulation.

-- maybe a book review assignment?
behavioral_economics  book  judgment_decision-making  dmce  teaching 
march 2017 by rvenkat
The Under-Appreciated Drive for Sense-Making by Nick Chater, George Loewenstein :: SSRN
This paper draws attention to a powerful human motive that has not yet been incorporated into economics: the desire to make sense of our immediate experience, our life, and our world. We propose that evolution has produced a ‘drive for sense-making’ which motivates people to gather, attend to, and process information in a fashion that augments, and complements, autonomous sense-making. A large fraction of autonomous cognitive processes are devoted to making sense of the information we acquire: and they do this by seeking simple descriptions of the world. In some situations, however, autonomous information processing alone is inadequate to transform disparate information into simple representations, in which case, we argue, the drive for sense-making directs our attention and can lead us to seek out additional information. We propose a theoretical model of sense-making and of how it is traded off against other goals. We show that the drive for sense-making can help to make sense of a wide range of disparate phenomena, including curiosity, boredom, ‘flow’, confirmation bias and information avoidance, aesthetics (both in art and in science), why we care about others’ beliefs, the importance of narrative and the role of ‘the good life’ in human decision making.
dmce  teaching  judgment_decision-making  cognitive_science  cultural_cognition 
march 2017 by rvenkat
Information Gaps for Risk and Ambiguity by Russell Golman, George Loewenstein, Nikolos Gurney :: SSRN
We apply a model of preferences for information to the domain of decision making under risk and ambiguity. An uncertain prospect exposes an individual to an information gap. Gambling makes the missing information more important, attracting more attention to the information gap. To the extent that the uncertainty (or other circumstances) makes the information gap unpleasant to think about, an individual tends to be averse to risk and ambiguity. Yet in circumstances in which thinking about an information gap is pleasant, an individual may exhibit risk- and ambiguity-seeking. The model provides explanations for source preference regarding uncertainty, the comparative ignorance effect under conditions of ambiguity, aversion to compound risk, and a variety of other phenomena. We present an empirical test of one of the model’s novel predictions.
dmce  teaching  judgment_decision-making  behavioral_economics 
march 2017 by rvenkat
Information Avoidance
We commonly think of information as a means to an end. However, a growing theoretical and experimental literature suggests that information may directly enter the agent's utility function. This can create an incentive to avoid information, even when it is useful, free, and independent of strategic considerations. We review research documenting the occurrence of information avoidance, as well as theoretical and empirical research on reasons why people avoid information, drawing from economics, psychology, and other disciplines. The review concludes with a discussion of some of the diverse (and often costly) individual and societal consequences of information avoidance.
judgment_decision-making  heuristics  behavioral_economics  dmce  teaching 
march 2017 by rvenkat
Processing political misinformation: comprehending the Trump phenomenon | Open Science
This study investigated the cognitive processing of true and false political information. Specifically, it examined the impact of source credibility on the assessment of veracity when information comes from a polarizing source (Experiment 1), and effectiveness of explanations when they come from one's own political party or an opposition party (Experiment 2). These experiments were conducted prior to the 2016 Presidential election. Participants rated their belief in factual and incorrect statements that President Trump made on the campaign trail; facts were subsequently affirmed and misinformation retracted. Participants then re-rated their belief immediately or after a delay. Experiment 1 found that (i) if information was attributed to Trump, Republican supporters of Trump believed it more than if it was presented without attribution, whereas the opposite was true for Democrats and (ii) although Trump supporters reduced their belief in misinformation items following a correction, they did not change their voting preferences. Experiment 2 revealed that the explanation's source had relatively little impact, and belief updating was more influenced by perceived credibility of the individual initially purporting the information. These findings suggest that people use political figures as a heuristic to guide evaluation of what is true or false, yet do not necessarily insist on veracity as a prerequisite for supporting political candidates.
political_psychology  cultural_cognition  social_construction_of_knowledge  heuristics  judgment_decision-making  dmce  teaching  via:nyhan 
march 2017 by rvenkat
Precedent and Doctrine in a Complicated World | American Political Science Review | Cambridge Core
Courts resolve individual disputes and create principles of law to justify their decisions and guide the resolution of future cases. Those tasks present informational challenges that affect the whole judicial process. Judges must simultaneously learn about (1) the particular facts and legal implications of any dispute; (2) discover the doctrine that appropriately resolves the dispute; and (3) attempt to articulate those rules in the context of a single case so that future courts may reason from past cases. We propose a model of judicial learning and decision making in which there is a complicated relationship between facts and legal outcomes. The model has implications for many of the important questions in the judicial process, including the dynamics of common law development, the path-dependent nature of the law, and optimal case selection by supervisory courts.
law  judgment_decision-making  dmce  teaching 
february 2017 by rvenkat
‘Don't Tell Me What I Can't Do!’ On the Intrinsic Value of Control
For most people, control has some intrinsic value; people care about maintaining it and will pay something to do so. Whenever a private or public institution blocks choices or interferes with agency, some people will rebel, even if exercising control would not result in material benefits or might produce material harms. On the other hand, people sometimes want to relinquish control, because exercising agency is burdensome or costly. This essay explores when rational and boundedly rational people will prefer to maintain or exercise control and when they will prefer to delegate it.

-- nothing new here, but interesting way to use 'value of control' approach to understand frame construction mechanisms.
dmce  teaching  rational_choice  judgment_decision-making  social_behavior  via:sunstein 
february 2017 by rvenkat
The Data That Turned the World Upside Down | Motherboard
-- Overblown hype. Yet another it-all-depends-on-the-swing-voter approach to intervention. .... be surprised if this is solid.
psychology  big_five  political_psychology  political_science  marketing  big_data  us_elections  judgment_decision-making  dmce  teaching  i_remain_skeptical 
january 2017 by rvenkat
The Real Story About Fake News Is Partisanship - The New York Times
-- researchers mentioned in the article seem convinced of media mediated polarization is a large factor in observed partisanship and emergence of partyism. Are there meta-studies that back this outsized influence? Are they based on mediation analysis? .... I am not convinced...
cultural_cognition  political_psychology  sociology  us_politics  united_states_of_america  judgment_decision-making  dmce  teaching  NYTimes 
january 2017 by rvenkat
[1606.04956] Assessing Human Error Against a Benchmark of Perfection
An increasing number of domains are providing us with detailed trace data on human decisions in settings where we can evaluate the quality of these decisions via an algorithm. Motivated by this development, an emerging line of work has begun to consider whether we can characterize and predict the kinds of decisions where people are likely to make errors.
To investigate what a general framework for human error prediction might look like, we focus on a model system with a rich history in the behavioral sciences: the decisions made by chess players as they select moves in a game. We carry out our analysis at a large scale, employing datasets with several million recorded games, and using chess tablebases to acquire a form of ground truth for a subset of chess positions that have been completely solved by computers but remain challenging even for the best players in the world.
We organize our analysis around three categories of features that we argue are present in most settings where the analysis of human error is applicable: the skill of the decision-maker, the time available to make the decision, and the inherent difficulty of the decision. We identify rich structure in all three of these categories of features, and find strong evidence that in our domain, features describing the inherent difficulty of an instance are significantly more powerful than features based on skill or time.
sendhil.mullainathan  judgment_decision-making  algorithms  dmce  teaching 
december 2016 by rvenkat
David M Rothschild, PhD – David Rothschild's Research Website
-- he is part of Penn Opinion Research http://pores.upenn.edu/ and has a forthcoming paper with Gelman and another one with Wolfers.
people  economics  prediction_market  judgment_decision-making  dmce  teaching 
august 2016 by rvenkat
The Mortgage Illusion by Nelson Camanho, Daniel Fernandes :: SSRN
We propose and test a new heuristic on the decision to buy or rent a house: the mortgage illusion, in which potential home buyers are influenced by the comparison between the monthly rental payment and the monthly mortgage installment, for fixed rate mortgages. We find experimental evidence that home buyers are more likely to buy when the monthly rental payment is higher than the monthly mortgage installment. Our experimental designs and results are robust to ownership bias and home buyers’ budget constraints. Financial literacy and numeracy do not help to overcome the mortgage illusion.
heuristics  judgment_decision-making  dmce  teaching  experiments  amazon_turk  via:sunstein 
july 2016 by rvenkat
Procrastination in Teams by Joshua S. Gans, Peter Landry :: SSRN
Naively present-biased agents are known to be severe procrastinators. In team settings, procrastination can represent a form of free-riding that, in excess, can jeopardize a team's ability to meet a deadline. Despite their reputations, we show how naivete and present bias can, under the right conditions, be desirable traits in a teammate that enable a team to optimize its performance while eliminating inefficient free-riding. These benefits emerge only from a more flexible specification (in comparison to existing models) as to how naive players reassess prior beliefs upon confronting present bias. By allowing the 'depth' and 'direction' of such reassessments to vary, our model links present-biased discounting theories to the recently-revived interest in modeling non-Bayesian reactions to null events, while offering a distinct approach reminiscent of level-k reasoning. Key themes from our results include the value of behavioral diversity, the opposite effects of 'introspection' and 'extrospection' on motivation, and that under- and over-thinking can both undermine efficiency.

-- there is one other place where the work explicitly talks about non-Bayesian updating, need to search for it. I am sure Josh Tenenbuam's mafia will make it Bayesian, somehow!
groups  judgment_decision-making  collective_cognition  collective_intention  behavioral_economics  dmce  teaching 
june 2016 by rvenkat
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