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The processing of complex information! A comparison on hypothetical and performance based payoff decisions

Author

Listed:
  • Eike B. Kroll

    (Otto-von-Guericke-University Magdeburg)

  • Joerg Rieger

    (Otto-von-Guericke-University Magdeburg)

  • Bodo Vogt

    (Otto-von-Guericke-University Magdeburg)

Abstract

This paper investigates the processing of repeated complex information. The focus of this study is whether additional information and the introduction of performance-based payoffs have an influence on judgment. Therefore, an experiment is designed to investigate the degree of precision and of quality in interval estimates. The data shows that providing additional information decreases the precision of stated estimates, while it improves its quality. The same result is obtained when performance-based payoffs are introduced to an otherwise hypothetical decision environment. This means that, while the variation in the treatment variables increases the quality of the estimate, the precision as a reflection of the decision maker's confidence is reduced.

Suggested Citation

  • Eike B. Kroll & Joerg Rieger & Bodo Vogt, 2014. "The processing of complex information! A comparison on hypothetical and performance based payoff decisions," Economics Bulletin, AccessEcon, vol. 34(1), pages 41-50.
    • Handle: RePEc:ebl:ecbull:eb-12-00882
    as

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    References listed on IDEAS

    as
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    4. Anderson, Lisa R & Holt, Charles A, 1997. "Information Cascades in the Laboratory," American Economic Review, American Economic Association, vol. 87(5), pages 847-862, December.
    5. Sniezek, Janet A. & Henry, Rebecca A., 1989. "Accuracy and confidence in group judgment," Organizational Behavior and Human Decision Processes, Elsevier, vol. 43(1), pages 1-28, February.
    6. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    interval estimates; uncertainty; judgmental estimation; repeated information; incentive effects;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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