Statistical formats to optimize evidence-based decision making: a behavioral approach
Statistical information is crucial for managerial decision making. The decision-making literature in psychology and mathematical cognition documents how different statistical formats can facilitate certain types of decisions. The present analysis is the first of its kind to assess the impact of statistical formats in the presentation of data from market research on both the optimality of market decisions and the time required to perform the decision-making process. An economic experiment provides the data for this study. The experiment presents statistical information in simple frequencies and relative frequencies using numerical and pictorial representations in the context of different informational environments. The key findings are that statistical information presented in terms of relative frequency formats gives rise to more accurate decision making than data presented in terms of simple frequencies, independently of the informational environments. When time is the relevant variable, numerical formats lead to a faster interpretation than pictorial ones. Since the number of factors defining the four statistical formats and the different informational environments is quite large, an orthogonal design offers a suitable experimental design. This design keeps the experiment manageable without substantially reducing its analytical power
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robin Hogarth and Emre Soyer, 2010. "Econometrics and Decision Making: Effects of Presentation Mode," Working Papers 426, Barcelona Graduate School of Economics.
- Robin Hogarth & Emre Soyer, 2010. "Econometrics and decision making: Effects of presentation mode," Economics Working Papers 1204, Department of Economics and Business, Universitat Pompeu Fabra.
- Christine Kaufmann & Martin Weber & Emily Haisley, 2013. "The Role of Experience Sampling and Graphical Displays on One's Investment Risk Appetite," Management Science, INFORMS, vol. 59(2), pages 323-340, July.
- Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
- Macchi, Laura, 2000. "Partitive Formulation of Information in Probabilistic Problems: Beyond Heuristics and Frequency Format Explanations," Organizational Behavior and Human Decision Processes, Elsevier, vol. 82(2), pages 217-236, July.
When requesting a correction, please mention this item's handle: RePEc:dbe:wpaper:0513. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emilio Calvo Ramón)
If references are entirely missing, you can add them using this form.