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Coherence and bidirectional reasoning in complex and risky decision-making tasks

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  • C. Gustav Lundberg

Abstract

The facts matter, but the story matters more. (David R. Dow, author of The autobiography of an execution, as cited in Lithwick, 2010, p. 10) The process of making sense of and making decisions in complex and risky task settings is illustrated via detailed examination of decision tasks given to professional external auditors making a going concern judgment and to non-experts serving as mock jurors. Consistent with coherence and constraint satisfaction theory, the assessments of the evidence do diverge and the correlations between the decision and the aspects, as well as those between the various aspects, become stronger as the decision-making process progresses. An examination of adjustments made to individual aspects illustrates how coherence is generated and highlights the role of relative aspect mutability. Neural network models are built of the various decisions and their outputs related to the decision-makers' stated confidence in their decisions. The findings shed further light on the workings of inference-based decision-making.

Suggested Citation

  • C. Gustav Lundberg, 2011. "Coherence and bidirectional reasoning in complex and risky decision-making tasks," New Zealand Economic Papers, Taylor & Francis Journals, vol. 45(1-2), pages 161-181.
    • Handle: RePEc:taf:nzecpp:v:45:y:2011:i:1-2:p:161-181
    DOI: 10.1080/00779954.2011.556077
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