New: Predicting Outcomes in a Sequence of Binary Events: Belief Updating and Gambler’s Fallacy Reasoning
We report on six experiments studying participants’ predictions of the next outcome in a sequence of binary events. Participants faced one of three mechanisms generating 18 sequences of 8 events: a random mechanical bingo cage, an intentional goal-directed actor, and a financial market. We systematically manipulated participants’ beliefs about the base rate probabilities at which different types of outcomes were generated by each mechanism. Participants either faced unknown (ambiguous) base rates, a specified distribution of three equiprobable base rates, or a precise, stationary base rate. Six target sequences ended in streaks of between two and seven identical outcomes. We focused on participants’ predictions of the ninth, unobserved outcome in each of these target sequences. Across all generating mechanisms and prior belief conditions, the most common prediction pattern was best described as close-to-rational belief updating, producing an increasingly strong bias toward ...
REVISION: Garbage in, Garbage Out? Some Micro Sources of Macro Errors
Many institutions, large or small, make their decisions through some process of deliberation. Nonetheless, deliberating institutions often fail, in the sense that they make judgments that are false or that fail to take advantage of the information that their members have. Micro mistakes can lead to macro blunders or even catastrophes. There are four such failures; all of them have implication for large-scale institutions as well as small ones. (1) Sometimes the predeliberation errors of an institution’s members are amplified, not merely propagated, as a result of deliberation. (2) Institutions fall victim to cascade effects, as the initial speakers or actors are followed by their successors, who do not disclose what they know. Nondisclosure, on the part of those successors, may be a product of either informational or reputational cascades. (3) As a result of group polarization, deliberating institutions sometimes end up in a more extreme position in line with their predeliberation ...
New: Democracy Under Uncertainty: The ‘Wisdom of Crowds’ and the Free-Rider Problem in Group Decision Mak
We introduce a game theory model of individual decisions to cooperate by contributing personal resources to group decisions versus by free-riding on the contributions of other members. In contrast to most public-goods games that assume group returns are linear in individual contributions, the present model assumes decreasing marginal group production as a function of aggregate individual contributions. This diminishing marginal returns assumption is more realistic and generates starkly ...
New: What’s Next? Judging Sequences of Binary Events
The authors review research on judgments of random and nonrandom sequences involving binary events with a focus on studies documenting gambler’s fallacy and hot hand beliefs. The domains of judgment include random devices, births, lotteries, sports performances, stock prices, and others. After discussing existing theories of sequence judgments, the authors conclude that in many everyday settings people have naive complex models of the mechanisms they believe generate observed events, and they ...
New: Perceived Causality as a Cue to Temporal Distance
The three experiments reported show that judgments of elapsed time between events depend on perceived causal relations between the events. Participants judged pairs of causally related events to occur closer together in time than pairs of causally unrelated events that were separated by the same actual time interval. The causality-time relationship was first demonstrated for time judgments about historical events. Causally related events
were judged to be significantly closer together in time ...
New: Introduction to the Special Issue: Decision Making and the Law
Legal decision making is different from other types of decision making in several ways. For example, the decision makers range from highly qualified and trained professionals such as judges, making repeated decisions alone to novices such as jurors, making one off decisions in groups. Pertinent information may be unavailable to the decision maker, and he/she is also unlikely to receive much feedback about the quality of a decision. However, legal decision makers rarely suffer any consequences ...
REVISION: Decision and Experience: Why Don't We Choose What Makes Us Happy?
Recent years have witnessed a growing interest among psychologists and other social scientists in subjective wellbeing and happiness. Here we review selected contributions to this development from the literature on behavioral decision theory. In particular, we examine many, somewhat surprising, findings that show people systematically fail to predict or choose what maximizes their happiness, and we look at reasons why they fail to do so. These findings challenge a fundamental assumption that ...
New: Effects of Amount of Information on Judgment Accuracy and Confidence
When a person evaluates his or her confidence in a judgment, what is the effect of receiving more judgment-relevant information? We report three studies that show when judges receive more information, their confidence increases more than their accuracy, producing substantial confidence-accuracy discrepancies. Our results suggest that judges do not adjust for the cognitive limitations that reduce their ability to use additional information effectively. We place these findings in a more general ...
REVISION: Hedonomics: Bridging Decision Research with Happiness Research
One way to increase happiness is to increase the objective levels of external outcomes; another is to improve the presentation and choices among external outcomes without increasing their objective levels. Economists focus on the 1st method. We advocate the second, which we call hedonomics. Hedonomics studies (a) relationships between presentations (how a given set of mfoutcomes are arranged among themselves or relative to other outcomes) and happiness and (b) relationships between choice ...
New: Four Failures of Deliberating Groups
Many groups make their decisions through some process of deliberation, usually with the belief that deliberation will improve judgments and predictions. But deliberating groups often fail, in the sense that they make judgments that are false or that fail to take advantage of the information that their members have. There are four such failures. (1) Sometimes the predeliberation errors of group members are amplified, not merely propagated, as a result of deliberation. (2) Groups may fall victim ...
New: Calibration Trumps Confidence as a Basis for Witness Credibility
In the courtroom and in laboratory studies, confident witnesses are viewed as more credible, and thus have more influence on judgments and verdicts, than unconfident witnesses. In two experiments (with college student subjects) we demonstrate that erroneous testimony may damage the credibility of a high-confidence witness more than a low-confidence one. We show that listeners rely on a source's calibration - whether the source's confidence is appropriate to the level of knowledge - rather ...
New: What Happened on Deliberation Day?
What are the effects of deliberation about political issues? This essay reports the results of a kind of Deliberation Day, involving sixty-three citizens in Colorado. Groups from Boulder, a predominantly liberal city, met and discussed global warming, affirmative action, and civil unions for same-sex couples; groups from Colorado Springs, a predominately conservative city, met to discuss the same issues. The major effect of deliberation was to make group members more extreme than they were ...