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The distortion of information to support an emerging evaluation of risk

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  • Russo, J.E.
  • Yong, Kevyn
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    Abstract

    A persistent problem in the assessment of the risk of an event is a bias driven by the desirability of different outcomes. However, such a desirability bias should not occur in the absence of prior dispositions toward those outcomes. This assumption is tested in an experiment designed to track the evaluation of information during an emerging evaluation of risk. Results confirm the presence of a substantial desirability bias even when there is no prior disposition toward any outcome. These findings bear implications for the assessment of risk not only in the presence of prior desirability, but also in situations currently considered benign.

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    File URL: http://www.sciencedirect.com/science/article/B6VC0-50H7D8K-3/2/215c1d4cd5dc9c272b0a554f7ca8e6bc
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Econometrics.

    Volume (Year): 162 (2011)
    Issue (Month): 1 (May)
    Pages: 132-139

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    Handle: RePEc:eee:econom:v:162:y:2011:i:1:p:132-139

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    Web page: http://www.elsevier.com/locate/jeconom

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    Keywords: Desirability bias Distortion of information Format of information Risk Risk assessment;

    References

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    1. Carlson, Kurt A. & Pearo, Lisa Klein, 2004. "Limiting predecisional distortion by prior valuation of attribute components," Organizational Behavior and Human Decision Processes, Elsevier, vol. 94(1), pages 48-59, May.
    2. Meloy, Margaret G. & Russo, J. Edward, 2004. "Binary choice under instructions to select versus reject," Organizational Behavior and Human Decision Processes, Elsevier, vol. 93(2), pages 114-128, March.
    3. J. Edward Russo & Margaret G. Meloy & T. Jeffrey Wilks, 2000. "Predecisional Distortion of Information by Auditors and Salespersons," Management Science, INFORMS, vol. 46(1), pages 13-27, January.
    4. William Boulding & Ajay Kalra & Richard Staelin, 1999. "The Quality Double Whammy," Marketing Science, INFORMS, vol. 18(4), pages 463-484.
    5. Kurt A. Carlson & Samuel D. Bond, 2006. "Improving Preference Assessment: Limiting the Effect of Context Through Pre-exposure to Attribute Levels," Management Science, INFORMS, vol. 52(3), pages 410-421, March.
    6. Elke U. Weber & Christopher Hsee, 1998. "Cross-Cultural Differences in Risk Perception, but Cross-Cultural Similarities in Attitudes Towards Perceived Risk," Management Science, INFORMS, vol. 44(9), pages 1205-1217, September.
    7. Russo, J. Edward & Medvec, Victoria Husted & Meloy, Margaret G., 1996. "The Distortion of Information during Decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(1), pages 102-110, April.
    8. DeKay, Michael L. & PatiƱo-Echeverri, Dalia & Fischbeck, Paul S., 2009. "Distortion of probability and outcome information in risky decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 109(1), pages 79-92, May.
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    Cited by:
    1. Seth A. Miller & Michael L. DeKay & Eric R. Stone & Clare M. Sorenson, 2013. "Assessing the sensitivity of information distortion to four potential influences in studies of risky choice," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(6), pages 662-677, November.

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