IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Does Decision Quality (Always) Increase with the Size of Information Samples? Some Vicissitudes in Applying the Law of Large Numbers

Listed author(s):
  • Yaakov Kareev

    ()

  • Klaus Fiedler
Registered author(s):

    Adaptive decision-making requires that environmental contingencies between decision options and their relative advantages and disadvantages be assessed accurately and quickly. The research presented in this article addresses the challenging notion that contingencies may be more visible from small than large samples of observations. An algorithmic account for such a "less-is-more" effect is offered within a threshold-based decision framework. Accordingly, a choice between a pair of options is only made when the contingency in the sample that describes the relative utility of the two options exceeds a critical threshold. Small samples – due to their instability and the high dispersion of their sampling distribution – facilitate the generation of above-threshold contingencies. Across a broad range of parameter values, the resulting small-sample advantage in terms of hits is stronger than their disadvantage in terms of false alarms. Computer simulations and experimental findings support the predictions derived from the threshold model. In general, the relative advantage of small samples is most apparent when information loss is low, when decision thresholds are high, and when ecological contingencies are weak to moderate.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://ratio.huji.ac.il/sites/default/files/publications/dp347.pdf
    Download Restriction: no

    Paper provided by The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem in its series Discussion Paper Series with number dp347.

    as
    in new window

    Length: 66 pages
    Date of creation: Jan 2004
    Publication status: Published in Journal of Experimental Psychology: Learning, Memory and Cognition, 2006, vol. 32, pp. 883-903.
    Handle: RePEc:huj:dispap:dp347
    Contact details of provider: Postal:
    Feldman Building - Givat Ram - 91904 Jerusalem

    Phone: +972-2-6584135
    Fax: +972-2-6513681
    Web page: http://www.ratio.huji.ac.il/
    Email:


    More information through EDIRC

    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.:

    as
    in new window


    1. G. Kuder & M. Richardson, 1937. "The theory of the estimation of test reliability," Psychometrika, Springer;The Psychometric Society, vol. 2(3), pages 151-160, September.
    2. Gigerenzer, Gerd & Todd, Peter M. & ABC Research Group,, 2000. "Simple Heuristics That Make Us Smart," OUP Catalogue, Oxford University Press, number 9780195143812.
    3. Rosenthal,Robert, 2009. "Judgment Studies," Cambridge Books, Cambridge University Press, number 9780521101479.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:huj:dispap:dp347. 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: (Michael Simkin)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.