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Effects of feedback and complexity on repeated decisions from description


  • Lejarraga, Tomás
  • Gonzalez, Cleotilde


Recent evidence from research in risky choice shows that decisions from experience differ significantly from decisions from description, particularly when problems include a small-probability event and when samples from experience are small. Little is known, however, about the cognitive processes behind repeated decisions where both descriptive and experiential information are available for the decision maker. While previous findings suggest that feedback makes choices “deviate” from the predictions of prospect theory (Jessup, Bishara, & Busemeyer, 2008), we find a stronger effect: Our results suggest that information from description is neglected in the presence of feedback. Moreover, we find that in the presence of feedback, descriptions are overlooked irrespective of the level of complexity of the decision scenario. We show that an instance-based learning model and a reinforcement learning model account for the observed decisions by solely relying on observed outcomes. We discuss our findings in the context of organizational behavior.

Suggested Citation

  • Lejarraga, Tomás & Gonzalez, Cleotilde, 2011. "Effects of feedback and complexity on repeated decisions from description," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(2), pages 286-295.
  • Handle: RePEc:eee:jobhdp:v:116:y:2011:i:2:p:286-295
    DOI: 10.1016/j.obhdp.2011.05.001

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    References listed on IDEAS

    1. Barron, Greg & Leider, Stephen & Stack, Jennifer, 2008. "The effect of safe experience on a warnings' impact: Sex, drugs, and rock-n-roll," Organizational Behavior and Human Decision Processes, Elsevier, vol. 106(2), pages 125-142, July.
    2. Ido Erev & Ira Glozman & Ralph Hertwig, 2008. "What impacts the impact of rare events," Journal of Risk and Uncertainty, Springer, vol. 36(2), pages 153-177, April.
    3. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
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    Cited by:

    1. Schurr, Amos & Rodensky, Dotan & Erev, Ido, 2014. "The effect of unpleasant experiences on evaluation and behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 1-9.
    2. Hogarth, Robin M. & Soyer, Emre, 2015. "Communicating forecasts: The simplicity of simulated experience," Journal of Business Research, Elsevier, vol. 68(8), pages 1800-1809.
    3. Kim, Younjun, 2015. "Essays on firm location decisions, regional development and choices under risk," ISU General Staff Papers 201501010800005579, Iowa State University, Department of Economics.


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