The Role of Cognitive Biases for Users' Decision-Making in IS Usage Contexts

Human cognition and decision-making related to information systems (IS) is a major area of interest in IS research. However, despite being explored since the mid-seventies in psychology, the phenomenon of cognitive biases has only recently gained attention among IS researchers. This fact is reflected inter alia in the lack of a comprehensive literature review of research on cognitive biases in IS, on which authors could build their work upon. Against this backdrop, this thesis presents a scientometric analysis of 12 top IS outlets covering the time period between 1992 and 2012, providing a comprehensive picture of the current state of research on cognitive biases in IS. Building on its results and considering the current trends in IS usage practice, this thesis further presents three articles in the IS usage contexts ‘personal productivity software’ and ‘e-commerce’. These articles investigate the influence of cognitive biases on IS users’ decision-making and the potential reasons thereof on the example of software updates and purchase pressure cues. The first two studies draw on expectation-confirmation theory and the IS continuance literature. Within the first study, a laboratory experiment reveals that feature updates have a positive effect on users’ continuance intention (CI) – the update-effect. According to this effect, software vendors can increase their users’ CI by delivering updates incrementally rather than providing the entire feature set right with the first release. However the results show that the update-effect only occurs if the number of updates does not exceed a tipping point in a given timeframe, disclosing update frequency as crucial boundary condition. Additionally, the study indicates that this effect operates through positive disconfirmation of expectations, resulting in increased user satisfaction. The second study expands the focus of the first study by considering feature as well as non-feature updates and elaborating on the explanatory role of satisfaction (SAT), perceived ease of use (PEOU) and perceived usefulness (PU). Besides update frequency, the findings demonstrate update type as another boundary condition to the repeatedly identified update-effect, that is, it occurs only with functional feature updates and not with technical non-feature updates. Moreover, by analyzing the practice of employing purchase pressure cues (PPCs) on commercial websites, the third study provides another example of the effect of cognitive biases on users’ decision making in the IS usage context ‘e-commerce’. The results show that while limited time (LT) pressure cues significantly increase deal choice, limited product availability (LPA) pressure cues have no distinct influence on it. Furthermore, perceived stress and perceived product value serve as two serial mediators explaining the theoretical mechanism of why LT pressure cues affect deal choice. Overall, the thesis highlights the role of human cognition and decision-making, and specifically of cognitive biases, for IS related users’ decisions. It further emphasizes the importance of an alterable and malleable IS for the occurrence of biased decision-making. Moreover, the findings shed light on the underlying explanatory mechanisms of how and why biased decision-making takes place, thus answering several calls for research and elaborating on existing theories from psychology and IS. Software vendors and online retailers may use the findings described in the thesis to better understand how and why cognitive biases can be applied in a targeted way to achieve positive revenue effects. Specifically, software vendors are advised to distribute software functionality over time via updates, because feature updates can induce a positive state of surprise, which, in turn, increases users’ CI. However, while the thesis’ results disclose the update-effect as a useful measure for software vendors to achieve customers’ satisfaction regarding a software product, it is also necessary to consider its boundary conditions in order to achieve the desired outcomes. Finally, online retailers are advised to carefully select the PPCs on their websites. While the thesis’ results show that some of them are cost-effective solutions to stimulate positive value perceptions, which in turn impact online purchases, they also reveal that others have no effect on users’ purchase decisions and can even be perceived as an attempt at deception.