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New Directions in Research on Decision Making

B. Brehmer, H . Jungermann, P. Lourens, and G . Sevo'n (Editors)

© Elsevier Science Publishers B.V. (North-Holland), 1986

JUDGMENT AS A COMPONENT DECISION PROCESS FOR CHOOSING BETWEEN SEQUENTIALLY AVAILABLE ALTERNATIVES

Franz Schmalhofer Heiner Gertzen University of Freiburg

F.R. Germany

University o f Heidelberg F.R. Germany

Choice a l t e r n a t i v e s are frequently presented as multidimensional descriptions. I n some cases the a l t e r n a t i v e s can be looked a t together, While i n other cases the a l t e r n a t i v e s are located i n d i f f e r e n t places and can only be inspected i n sequence. For example, the products offered i n a store are simultaneously available t o the purchaser, whereas the information about products i n d i f f e r e n t stores must be processed i n sequence, p o s s i b l y separated by some unrelated cognitive a c t i v i t y such as finding the way t o the next store. This d i f f e r e n t i a l a v a i l a b i l i t y of the information about the alternatives could influence the cognitive processes which determine a choice. For simultaneously a v a i l a b l e a l t e r n a t i v e s , dimensional comparisons are usually applied t o derive a choice ( Russo & Dosher, 1983). However, dimensional processing could lead t o a high cognitive load f o r sequentialy presented a l t e r n a t i v e s . Since people have l i m i t e d capacity f o r processing information, they tend t o apply decision procedures which reduce t h i s cognitive load. To reduce the cognitive e f f o r t a strategy involving o v e r a l l judgments of each a l t e r n a t i v e and a subsequent comparison of the o v e r a l l judgments could be applied instead.

In the present paper, the c r i t e r i o n dependent choice models designed t o explain the s e l e c t i v i t y and adaptiveness of human choice processes (Schmalhofer, Albert, Aschenbrenner & Gertzen, 1986) are used t o analyze the e f f o r t and q u a l i t y of two d i f f e r e n t choice procedures. For s e q u e n t i a l l y and simultaneously a v a i l a b l e a l t e r n a t i v e s dimensional comparisons and o v e r a l l judgments w i l l be analyzed as component processes i n binary choices.

The r e s u l t s of t h i s analysis w i l l then be compared t o the r e s u l t s of an

This research was supported by a grant from DFG (Al 205/1). We g r a t e f u l l y acknowledge the comments o f D. Albert, K . M . Aschenbrenner, and B. Brehmer.

Authors' addresses: Psych. Inst., Niemensstr. 10, 7800 Freiburg or Psych.

Inst., Haupstr. 47-51, 6900 Heidelberg, West Germany.

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experiment i n which choice p a i r s were presented simultaneously, sequentially, or sequentially and separeted by some interpolated task.

C r i t e r i o n and Dependent Choice Models

The basic assumption of c r i t e r i o n dependent choice models i s that the processing of an a l t e r n a t i v e or choice p a i r continues u n t i l some evidence c r i t e r i o n i s surpassed. This evidence c r i t e r i o n i s s p e c i f i e d by a number k, which i s the only free parameter i n a c r i t e r i o n dependent model. Thus, decision making i s assumed to be a s e l e c t i v e , sequential process. The c r i t e r i o n dependent choice models postulate that the a v a i l a b i l i t y (and importance) of the features of the choice a l t e r n a t i v e s determines both which features w i l l be processed and the order i n which they w i l l be processed.

The processing of a feature y i e l d s an attractiveness value f o r that feature. For a t t r a c t i v e and unattractive features, p o s i t i v e or negative attractiveness values are obtained, respectively. The attractiveness values are combined according t o some r u l e . This r u l e may specify dimensional comparisons or the formation of o v e r a l l judgments as component processes of choices.

Dimensional Comparisons as Component Processes. I t i s assumed that at the beginning of the choice process neither a l t e r n a t i v e i s favoured. Therefore, at the beginning the evidence value i s assumed t o be zero. In the f i r s t processing step the features on the most important dimension are evaluated, and the difference of the two attractiveness values i s calculated. This calculated value represents the evidence value a f t e r the processing of the f i r s t dimension. Then the second most important dimension i s processed.

A f t e r the processing of the second dimension the evidence value i s updated by adding the attractiveness difference determined f o r the second dimension.

This process continues u n t i l a l l dimensions have been processed or one or two c r i t e r i a i s surpassed, i . e . the evidence value i s larger than k or the evidence value i s smaller than -k. A p o s i t i v e evidence value determines the choice of an a l t e r n a t i v e , and a negative evidence value determines the choice of the other a l t e r n a t i v e . Previous experimental research has shown that such models can account for the information processing of dimensionally described and simultaneously presented choice alternatives (Aschenbrenner, Albert & Schmalhofer, 1984). S i m i l a r models have been used t o explain

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decision making under uncertainty (Busemeyer, 1985).

A dimensional strategy may be d i f f i c u l t t o apply f o r sequentially presented a l t e r n a t i v e s , because the feature of the f i r s t a l t e r n a t i v e would have to be stored i n memory u n t i l the next a l t e r n a t i v e becomes a v a i l a b l e . To decrease the demands upon working memory, subjects could however use judgment as a component decision process i n t h i s case. Thus, subjects would make an o v e r a l l judgment of the f i r s t a l t e r n a t i v e and store i t i n memory rather than i t s features. A second o v e r a l l judgment i s then made f o r the second a l t e r n a t i v e , and the decision would be based upon a comparison between the two o v e r a l l judgments. For such a strategy, the c r i t e r i o n dependent processing occurs f o r the formation of the judgments of the two choice a l t e r n a t i v e s .

Judgment as Component Processes. The procedural character i n the cognitive formation of judgments has already been emphasized by Lopes (1982). Contrary to Lopes' averaging assumption, the present conception assumes that the feature evaluations, which which may be p o s i t i v e or negative, are summed. In p a r t i c u l a r , i t i s assumed that at the beginning of the judgment process the evidence value i s zero, i . e . , there i s no bias towards a p o s i t i v e or a negative judgment. In the f i r s t processing step, the feature of the most important dimension i s evaluated and represents the evidence value a f t e r the processing of the f i r s t dimension. Then the second most important dimension i s processed. A f t e r the processing of the second dimension the evidence value i s uppdated by adding the new attractiveness value. This process continues u n t i l one of two c r i t e r i a i s surpassed or a l l features have been processed. I f the boundary k i s surpassed the a l t e r n a t i v e i s considered t o be a t t r a c t i v e . I f the boundary -k i s surpassed the a l t e r n a t i v e i s unattractive. A judgment about the choice a l t e r n a t i v e i s obtained by d i v i d i n g the evidence value (the sum of the attractiveness values) by the number of the features that have been processed.

Note, that according t o t h i s model, the number of processed features depends upon the p a r t i c u l a r choice a l t e r n a t i v e . For very a t t r a c t i v e and very unattractive a l t e r n a t i v e s , fewer features w i l l be processed than f o r less extreme a l t e r n a t i v e s .

A judgment of the a l t e r n a t i v e presented second i s derived i n the same way. The a l t e r n a t i v e which receives the b e t t e r judgment w i l l then be chosen.

For the two processing strategies, the e f f o r t and q u a l i t y of a choice can now analyzed under the conditions of simultaneous or sequential presentation

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of the choice a l t e r n a t i v e s .

E f f o r t - Q u a l i t y Analyses

To demonstrate that the judgment based strategy r e a l l y leads t o less cognitive load under conditions of sequential presentation, e f f o r t - q u a l i t y

(Schmalhofer & S a f f r i c h , 1984) or performance-resourcse functions (Norman &

Bobrow, 1975) were computed. Johnson & Payne (1985) have pointed out that such analyses depend upon the p a r t i c u l a r choice a l t e r n a t i v e s under examination. Therefore, the e f f o r t - q u a l i t y analyses were performed f o r alternatives which would indeed be considered by the i n d i v i d u a l subjects i n a choice task.

Method

Subjects. Eighteen University of Heidelberg students p a r t i c i p a t e d i n the experiment.

Procedure. Every subject was randomly assigned t o one of four choice domains (choosing a news magazine, vacation area, r e n t a l car, or u n i v e r s i t y to study a t ) . For the selected domain subjects were asked t o name nine alternatives which they would consider i n a choice s i t u a t i o n . Further, they specified the 11 dimensions which they considered t o be most relevant f o r the choice and ordered these dimensions by t h e i r importance. The subjects then generated the respective features of the 9 a l t e r n a t i v e s on the 11 dimensions. F i n a l l y , the attractiveness of every feature was rated on a 7- point scale.

Results

Three indicators of cognitive e f f o r t were calculated. The number of accumulation operations as w e l l as the number of comparison operations required to derive a choice by the two strategies were calculated as two separate indicators of computational e f f o r t . I t can be assumed that feature comparisons w i t h i n a dimension are easier t o perform than accumulations across dimensions (Tversky, 1969). Since memory load i s c r u c i a l f o r the difference between simultaneous and sequential a v a i l a b i l i t y of choice alternatives, the average number of items held i n working memory f o r each processing step was computed as a t h i r d indicator of cognitive e f f o r t .

The three indicators were calculated as follows: Whenever a strategy

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required the a d d i t i o n o f e i t h e r an attractiveness value o r an attractiveness difference t o the running evidence value, t h i s was calculated as an accumulation operation. Each determination o f an attractiveness difference, i . e . , the comparison of feature evaluations w i t h i n a dimension or the judgment of o v e r a l l judgments, was counted as a comparison operation.

Average memory load was calculated as follows: For every processing step, i t was determined how many items had t o kept i n memory t o enable the a p p l i c a t i o n of each strategy. Due t o the p a r t i c u l a r strategy, the stored items could consist of s i n g l e features, the running evidence valua and/or the o v e r a l l judgment o f an a l t e r n a t i v e . The items thus determined f o r each step are summed up over a l l processing steps f o r a choice p a i r and then divided by the number of processing steps f o r that choice p a i r . This y i e l d s the average memory load per processing step. The percentage of choices coinciding with the choice predictions of tha additive model serced as an indicator of choise q u a l i t y .

The e f f o r t and q u a l i t y measures were computed f o r every possible value of the c r i t e r i o n k. For every subject, the c a l c u l a t i o n s were performed f o r a complete paired comparison of the 9 a l t e r n a t i v e s . For a given parameter value k, the model calculations y i e l d a measure f o r accumulation operations and comparison operations (computational e f f o r t ) and memory e f f o r t , as w e l l as the percentage of choices coinciding with the choices of the a d d i t i v e model (quality measure). For two q u a l i t y l e v e l s , the respective r e s u l t s o f the two processing strategies under simultaneous and sequential presentation of the a l t e r n a t i v e s are shown i n Table 1.

Since there i s no difference between sequentially and simultaneously presented a l t e r n a t i v e s f o r the judgment based procedure, the indicators of the judgment based procedure are presented only once. As would be expected, however, Table 1 shows that the memory e f f o r t required for the dimensional strategy i s much grater f o r sequentially a v a i l a b l e a l t e r n a t i v e s than f o r the simultaneously presented a l t e r n a t i v e s . More important, the memory e f f o r t s o f t h i s procedure c l e a r l y exceeds the respective measure of judgment based processing for sequentially a v a i l b l e a l t e r n a t i v e s . Though the average number of items held i n memory per processing step s l i g h t l y decreases w i t h increasing values of k (and consequently with an increasing number of steps), the memory load a t the beginning of the choice process i s quite high and may w e l l exceed the capasity of working memory. Judgment based processing on the other hand requires more accumulations across dimensions which are probably more d i f f i c u l t t o perform than comparisons w i t h i n

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Table 1: E f f o r t i n d i c a t o r s f o r two processing s t r a t e g i e s under two task demands for two selected q u a l i t y l e v e l s ( i . e . , l e v e l 1 = 83 % and l e v e l 2 = 97 % of choices coinciding with the a d d i c t i v e rule)

Number of:

Accumulation Comparison Items i n memory operations operations per processing step l e v e l 1/1 l e v e l 1/2 l e v e l 1/1 l e v e l 1/2 l e v e l 1/1 l e v e l 1/2 Judgment 6.8 17.5 1.0 1.0 1.5 1.5 based

processing

Dimensional processing

for:

-sequential 2.0 5.8 3.0 6.8 11.0 9.1 presentation

-simultaneous 2.0 5.8 3.0 6.8 1.0 1.0 presentation

Note. Because of the l i m i t e d capacity of working memory a high memory load i n one processing step can hardly be compensated f o r a low memory load i n a second processing step. The reported average memory load i s a global and therefore a p o s s i b l y somewhat misleading characterization of memory demands.

dimensions. Thus the advantages of judgment based processing of sequentially presented alternatives may not be as c l e a r cut as we had o r i g i n a l l y assumed.

In order t o examine which strategies subjects a c t u a l l y apply an experiment was performed. Since choise predictions by themselves may not s u f f i c e t o indicate which strategy was used (Dawes & Corrigan, 1974), a d i t i o n a l i n d i c a t o r s were c o l l e c t e d . I f an o v e r a l l judgment of an a l t e r n a t i v e i s indeed formed, i t should become i n c i d e n t a l l y learned and stored i n memory. Consequently, memory judgments of the o v e r a l l evaluations of a l t e r n a t i v e s should p r e d i c t subjects' choices i f they used the judgment

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strategy t o derive a choice. Thus, we expect that memory judgments y i e l d better choice predictions under sequential presentation than under sinultaneous presentation of the a l t e r n a t i v e s .

Another v a r i a b l e of i n t e r e s t i s processing time. Since accumulations across dimensions are more d i f f i c u l t and therefore more time consuming than dimensional comparisons (Gamb, 1985), we would expect longer choice latencies f o r sequentially presented a l t e r n a t i v e s than f o r simultaneously presented a l t e r n a t i v e s .

Experiment

Several p a i r s o f multidimensional descriptions o f word processors were used as choice a l t e r n a t i v e s i n order t o investigate human decision s t r a t e g i e s . There were three between-subjects conditions i n the experiment: the two a l t e r n a t i v e s o f a choice p a i r could be presented (1) simultaneously, (2) sequentially, i . e . , one a f t e r the other, o r (3) one a f t e r the other with an i n t e r f e r i n g task i n between.

Method

Subjects. T h i r t y - s i x students of the U n i v e r s i t y of Heidelberg, who were paid DEM 10 per hour f o r t h e i r p a r t i c i p a t i o n i n the experiment, served as subjects.

Apparatus. The experiment was run under c o n t r o l o f Apple I I computers.

Learning materials and choice a l t e r n a t i v e s were presented on the video screen of the Apple computer. A button box with two response buttons and a lever which could be moved i n two dimensions was used f o r c o l l e c t i n g the subjects' responses.

Materials. Eight f i c t i o u s word processors, which were described by t h e i r features on eight dimensions, served as choice a l t e r n a t i v e s . For every description o f an a l t e r n a t i v e , a meaningless name (cvc-trigram) was introduced. A sample choice p a i r w i t h the respective meaningless names i s shown i n Table 2.

In order t o f a m i l i a r i z e the subjects with the relevant dimensions, a t e x t was constructed, which explained the eight relevant dimensions and the range of possible features o f the word processors. I n t h i s text, the features on a dimension (e.g., p r i n t i n g speed 80 characters per second) were s p e c i f i e d together with t h e i r respective evaluation (e.g., "optimal"). Furthermore the

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text described an importance ranking o f the eight dimensions, which was obtained i n a p r i o r study, i n which 32 subject ranked the eight dimensions by t h e i r importance.

Table 2. English t r a n s l a t i o n of a sample p a i r of word processors

Dimensions A l t e r n a t i v e s

TAF BID

correction f a c i l i t i e s optimal quite poor graphics f a c i l i t i e s moderate optimal a c c e s s i b i l i t y poor medium r e l i a b i l i t y quite poor very good

user friendliness good quite good

l e a r n a b i l i t y optimal moderate

maintenance costs good very good

p r i n t i n g speed quite good medium

Procedure. The experiment consisted of four major segments: a study task, decision task, memory tasks and r a t i n g tasks. Each of these segments began with instructions, which were displayed on the video screen. Every subject

f i r s t acquired knowledge by studying the explanatory t e x t about word processors, supposedly making a l l subjects equally knowledgable about word processors. A subject was then randomly assigned t o one o f the three experimental conditions. The three conditions d i f f e r e d i n how the multidimensional descriptions of the alternatives were presented:

simultaneously, seqentially, or sequentially with an interpolated task t o be performed between the presentations of the two a l t e r n a t i v e s . The interpolated task involved remembering a 5-digit number f o r 30 seconds. I n the simultaneous and sequential condition, the interopolated task was presented a f t e r a choice p a i r . I n the t h i r d condition the interpolated task was presented between the alternatives of a choice p a i r . I n order t o reduce the number o f times an a l t e r n a t i v e had t o be presented i n a complete paired comparison, the eight alternatives were divided i n t o two sets of four a l t e r n a t i v e r each. For both sets, a complete set of paired comparisons was performed. Since every a l t e r n a t i v e was presented i n the f i r s t as w e l l as i n the second p o s i t i o n , every choice had t o be presented twice, y i e l d i n g a

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t o t a l o f 24 choices.

Under simultaneous presentation both a l t e r n a t i v e s remained on the screen for 40 seconds. A f t e r 20 seconds a s i g n a l appeared a t the bottom o f the screen, i n d i c a t i n g that a choice could be made a t any time from then on by pressing the r i g h t or l e f t button, respectively. In the other two conditions

( i . e . , sequential presentation with or without the interpolated task between the a l t e r n a t i v e s of a p a i r ) each a l t e r n a t i v e remained v i s i b l e f o r 20 seconds. I n these two conditions a choice could be made as soon as the second a l t e r n a t i v e was presented. Thus, i n a l l three conditions the a l t e r n a t i v e s could be inspected f o r 40 seconds and a choice could be made a f t e r 20 seconds of inspection. Choices and choice latencies were c o l l e c t e d . The latency timer was started 20 seconds a f t e r the onset of the two a l t e r n a t i v e s (simultaneous presentation) or concurrently with the onset of the second a l t e r n a t i v e (sequential presentation). I t was stopped by the subject's button press.

A f t e r the 24 decision tasks, subjects judged the attractiveness of the a l t e r n a t i v e s from memory as w e l l as from multidimensional descriptions. I n the memory judgment task, subjects were only presented with the name o f the a l t e r n a t i v e . I n the (regular) judgment task, the respective multidimensional descriptions were shown t o the subjects without the a l t e r n a t i v e ' s name (cvc- trigram). The l a t t e r judgments were c o l l e c t e d f o r the sake of comparison.

The memory judgment task, which was separated from the (regular) judgment task by an i n t e r f e r i n g a c t i v i t y o f about 30 minutes, thus indicates the judgments about the a l t e r n a t i v e s which are stored i n the d e c i s i o n maker's memory a f t e r several choices.

At the end of the experiment subjects judged the importance of the eight dimensions and the attractiveness of the 64 features on a 9-point r a t i n g scale. These ratings were entered as external parameters i n t o the model predictions. The judgments were obtained by having the subjects move a lever so that the cursor was moved t o a respective judgment category. As soon as the desired category was reached, the subject pressed the button. I n a l l judgment tasks the nine categories ranged from unattractive (-4) t o very a t t r a c t i v e (+4). For the importance ratings the categories ranged from unimportant (-4) t o very important (+4).

Results and Discussion

A complete report of the experimental data i s given i n Gertzen (1985). I n t h i s paper, only the data which may i n d i c a t e whether dimensional comparison

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or judgment based strategies have been applied w i l l be reported. Both models c o r r e c t l y predicted approximately 80 percent of the choices f o r the three experimental conditions. Because no systematic differences existed i n the percentage of c o r r e c t l y predicted choices, the subjects' processing strategy cannot be inferred from these choice predictions. However, i f people based t h e i r decision upon the o v e r a l l judgment of the a l t e r n a t i v e s rather than upon dimensional comparisons, these o v e r a l l judgments should have been stored i n memory. The memory judgments should therefore have been s u i t a b l e f o r predicting a decision maker's choice. For deriving the choice predictions i t was assumed that the a l t e r n a t i v e with a higher memory judgment would be chosen. Table 3 shows the r e s u l t s .

Table 3: Relative frequency of correct choice predictions by judgments from memory, and correlations between judgments from memory and regular judgments.

Presentation of a l t e r n a t i v e s

simultaneous sequential with interpolated task predictions .54 .65 .73 correlations .22 .27 .35

The r e s u l t s show that for sequentially a v a i l a b l e a l t e r n a t i v e s , memory judgments were a better predictor of the choices than f o r simultaneously available alternatives ( X (2,553) =7.98, p< .005). In that case, there was also a higher c o r r e l a t i o n between the memory judgments and the (regular) judgments. A l l correlations s i g n i f i c a n t l y d i f f e r e d from zero; however, there were no s i g n i f i c a n t differences between the conditions of the experiment.

The r e s u l t s indicate that f o r sequentially presented a l t e r n a t i v e s , decision makers are more l i k e l y to base t h e i r choices upon o v e r a l l judgments of the alternatives than f o r simultaneously presented a l t e r n a t i v e s .

As can be seen from Table 4, choices between sequentially a v a i l a b l e alternatives required more time than choices between simultaneously available a l t e r n a t i v e s , F(2,33) = 14.3, p< .0001. Since a l t e r n a t i v e based processing usually requires more time than dimensional processing (Russo &

Dosher, 1983; Klayman, 1982), t h i s r e s u l t i s further evidence f o r the assumed a l t e r n a t i v e based processing of sequentially a v a i l a b l e a l t e r n a t i v e s .

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According t o the reported e f f o r t - q u a l i t y analysis, the longer latencies r e s u l t from execution o f a larger number o f operations which i n a d d i t i o n are more d i f f i c u l t and more time consuming t o perform.

Table 4: Average choice latencies and standard deviations ( i n parentheses) for the three experimental conditions

Presentation o f a l t e r n a t i v e s

simultaneous sequential with interpolated task

5.56 (3.30) 12.05 (5.31) 13.21 (2.97)

Summary and Conclusion

The present study indicates that f o r sequentially presented choice a l t e r n a t i v e s , decision makers are more l i k e l y t o apply a l t e r n a t i v e based processing, but not necessarily t o the complete exclusion o f any dimension based processing. This empirical r e s u l t i s consistent with the e f f o r t - q u a l i t y analyses f o r c r i t e r i o n dependant choice models which were reported at the beginning o f t h i s paper. These analyses shewed that f o r s e q u e n t i a l l y a v a i l a b l e a l t e r n a t i v e s , judgment based processing i s more economical, but does not completely dominate dimension based processing with respect t o e f f o r t - q u a l i t y measures. Nevertheless, the experimental r e s u l t s show that the differences i n the e f f o r t - q u a l i t y r e l a t i o n s are s i g n i f i c a n t and that more judgment based processing i s included by sequentially presented a l t e r n a t i v e s than by simultaneously presented a l t e r n a t i v e s .

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