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How performance based payoffs influence estimates of complex information? An experimental study on quality and precision in estimation tasks

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  • Kroll, Eike Benjamin
  • Rieger, Jörg
  • Vogt, Bodo

Abstract

This paper investigates the processing of repeated complex information. The focus of this study is, whether additional information and the introduction of performance-based payoffs have an influence on judgement. Therefore, an experiment is designed to investigate the degree of precision and quality of interval estimates. The data shows that providing additional information decreases the precision of stated estimates, while it improves its quality. The same result is obtained, when performance-based payoffs are introduced to an otherwise hypothetical decision environment. That means, while the variation in the treatment variables increase the quality of the estimate, the precision as a reflection of the decision makers confidence is reduced.

Suggested Citation

  • Kroll, Eike Benjamin & Rieger, Jörg & Vogt, Bodo, 2011. "How performance based payoffs influence estimates of complex information? An experimental study on quality and precision in estimation tasks," Working Paper Series in Economics 16, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    • Handle: RePEc:zbw:kitwps:16
    DOI: 10.5445/IR/1000022478
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    References listed on IDEAS

    as
    1. San Miguel, Joseph G., 1976. "Human information processing and its relevance to accounting: A laboratory study," Accounting, Organizations and Society, Elsevier, vol. 1(4), pages 357-373, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    interval estimates; uncertainty; judgmental estimation; repeated information; hypothetical versus payoffs; experiment;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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