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The Ecological Rationality of Simple Group Heuristics: Effects of Group Member Strategies on Decision Accuracy

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  • Torsten Reimer
  • Ulrich Hoffrage
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    Abstract

    The notion of ecological rationality implies that the accuracy of a decision strategy depends on features of the information environment in which it is tested. We demonstrate that the performance of a group may be strongly affected by the decision strategies used by its individual members and specify how this effect is moderated by environmental features. Specifically, in a set of simulation studies, we systematically compared four decision strategies used by the individual group members: two linear, compensatory decision strategies and two simple, noncompensatory heuristics. Individual decisions were aggregated by using a majority rule. To assess the ecological rationality of the strategies, we varied (a) the distribution of cue validities, (b) the quantity, and (c) the quality of shared information. Group performance strongly depended on the distribution of cue validities. When validities were linearly distributed, groups using a compensatory strategy achieved the highest accuracy. Conversely, when cue validities followed a J-shaped distribution, groups using a simple lexicographic heuristic performed best. While these effects were robust across different quantities of shared information, the quality of shared information exerted stronger effects on group performance. Consequences for prescriptive theories on group decision making are discussed Copyright Springer 2006

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    File URL: http://hdl.handle.net/10.1007/s11238-005-4750-2
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    Bibliographic Info

    Article provided by Springer in its journal Theory and Decision.

    Volume (Year): 60 (2006)
    Issue (Month): 4 (06)
    Pages: 403-438

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    Handle: RePEc:kap:theord:v:60:y:2006:i:4:p:403-438

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    Web page: http://www.springerlink.com/link.asp?id=100341

    Related research

    Keywords: compensatory and noncompensatory decision strategies; group decision making; group performance; simple heuristics;

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    1. Wiktor Adamowicz & Michel Hanemann & Joffre Swait & Reed Johnson & David Layton & Michel Regenwetter & Torsten Reimer & Robert Sorkin, 2005. "Decision Strategy and Structure in Households: A “Groups” Perspective," Marketing Letters, Springer, vol. 16(3), pages 387-399, December.
    2. Robin Hogarth & Natalia Karelaia, 2004. "Simple models for multi-attribute choice with many alternatives: When it does and does not pay to face tradeoffs with binary attributes," Economics Working Papers 739, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2005.
    3. Robin Hogarth & Natalia Karelaia, 2006. "“Take-the-Bestâ€\x9D and Other Simple Strategies: Why and When they Work “Wellâ€\x9D with Binary Cues," Theory and Decision, Springer, vol. 61(3), pages 205-249, November.
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