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Distortion of probability and outcome information in risky decisions

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  • DeKay, Michael L.
  • Patiño-Echeverri, Dalia
  • Fischbeck, Paul S.

Abstract

Substantial evidence indicates that information is distorted during decision making, but very few studies have assessed the distortion of probability and outcome information in risky decisions. In two studies involving six binary decisions (e.g., banning blood donations from people who have visited England, because of "mad cow disease"), student and nonstudent participants distorted their evaluations of probability and outcome information in the direction of their preferred decision alternative and used these biased evaluations to update their preferences. Participants also evaluated the utilities of possible outcomes more positively when the outcomes could follow only from the preferred alternative and more negatively when they could follow only from the competing alternative. Such circular reasoning is antithetical to the normative consequentialist principles underlying decision analysis. Presenting numerical information as precise values or as ranges of values did not significantly affect information distortion, apparently because the manipulation did not affect perceived ambiguity as intended.

Suggested Citation

  • DeKay, Michael L. & Patiño-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.
  • Handle: RePEc:eee:jobhdp:v:109:y:2009:i:1:p:79-92
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    References listed on IDEAS

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    Cited by:

    1. DeKay, Michael L. & Miller, Seth A. & Schley, Dan R. & Erford, Breann M., 2014. "Proleader and antitrailer information distortion and their effects on choice and postchoice memory," Organizational Behavior and Human Decision Processes, Elsevier, vol. 125(2), pages 134-150.
    2. Russo, J.E. & Yong, Kevyn, 2011. "The distortion of information to support an emerging evaluation of risk," Journal of Econometrics, Elsevier, vol. 162(1), pages 132-139, May.
    3. Windschitl, Paul D. & Scherer, Aaron M. & Smith, Andrew R. & Rose, Jason P., 2013. "Why so confident? The influence of outcome desirability on selective exposure and likelihood judgment," Organizational Behavior and Human Decision Processes, Elsevier, vol. 120(1), pages 73-86.
    4. Winkler, Jens & Moser, Roger, 2016. "Biases in future-oriented Delphi studies: A cognitive perspective," Technological Forecasting and Social Change, Elsevier, vol. 105(C), pages 63-76.
    5. Carlson, Kurt A. & Guha, Abhijit, 2011. "Leader-focused search: The impact of an emerging preference on information search," Organizational Behavior and Human Decision Processes, Elsevier, vol. 115(1), pages 133-141, May.

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