Understanding Biased Judgement And Decision-Making:A Framework Of Cognitive Sampling

Optimal choices assumed in rational-agent model are the results of theoretical deduction.Bounded by human cognitive capacity and the environmental structure in which behaviors take place,optional choices are routinely hard to achieve in actual decision-making situation.Since Simon proposed the theory of bounded rationality in 1950s,psychologists,behavioral economics and decision-making scholars have made great strides in identifying phenomena that cannot be explained by the classical model of rational choice.Biased judgment and decision-making,which refers to the systematic deviation that separates the cognition and decision of individual from the optimal belief and choice assumed in rational-agent model,has been an important concern in management and decision-making science,behavioral economics,psychology,and sociology,etc.Investigating the formation mechanism of biased judgement and decision-making not only contributes to revealing the similarities and relations among hundreds of biases identified in empirical studies,but also provides implications for improving the quality of practical management decision-making.Prior studies concerning biased judgement and decision-making in psychology has attempted to unriddle the mental processes of biased judgement and decision-making,resulting in different research perspectives,such as motivation,cognition and sampling.A sizable literature pertaining to motivational and cognitive perspectives attribute decision biases to the biasing impact of individuals' internal motivational constraints and cognitive deficits on information processing,while the sampling perspective proposed in the last decade has progressed the earlier notions by focusing on the information source of the decision-making,i.e.,environmental structure,revealing how the biasing information sampling leads to biases in judgement and decision-making.These perspectives are the important theoretical basis of this research,especially the sampling perspective,which is the motivation and basis of the cognitive sampling framework proposed by this thesis.On the basis of an extensive examination of the literature regarding afore-mentioned motivational,cognitive and environmental perspectives in psychology,this thesis puts forward a cognitive sampling framework which attributes decision biases to the biasing impact of"salience" on information sampling and utility reasoning.The cognitive sampling framework proposed in the current research introduces an important concept of "salience" which is the result of interaction between individual cognition and environment,and points out emphatically that the decision biases originate from the biasing impact of "salience" on the two-stage process of information sampling and utility reasoning.This analysis provides finer grained knowledge about the formation of biased judgment and decision-making,and innovatively reveals the transmission and superposition of biases in the two stages.Specifically,"salience" refers to the contrast differences of environmental stimuli in individual perception under the impact of boun ded cognition and individual preference.Essentially,judgement and decision biases are originated form the transmission and superposition of biases driven by salience in the two stages of information sampling and utility reasoning.The main research work of this thesis are as follows:(1)Theoretical analysis? Building on the different perspectives of biased judgement and decision-making in the field of psychology,this thesis proposes a cognitive sampling framework with two-stage process of information sampling and utility reasoning.The cognitive sampling framework emphasizes the biasing impact of "salience" on the two stages.Specifically,in the stage of information sampling,some samples in the internal(memory)and external environment having more advantages in physical perception,psychological perception and other features,are more easily sampled and thus being critical decision samples that impact decision-making;in the stage of utility reasoning,some of the attributes of the decision samples are more advantageous than the other attributes and thus being the basis for judgement and decision-making,leading to the cognition deviations of attributes.Salience is fundamentally regarded as the interaction between perceptual attributes of environmental stimulus and limited individual cognition.Biases in judgement and decision-making is a superposition of the deviations generated by these two cognitive stages driven by salience.It is one of the innovations of this thesis to put forward the salience driven cognitive sampling framework.(Chapter 3)? This thesis analyses the formation mechanism of the existing more than twenty types of decision biases with the cognitive sampling framework,and considers the specific embodiment of salience and cognitive sampling process in typical decision-making contexts,i.e.,word recall,information judgment,multi-alternatives risk decision and multi-alternatives consumer decision,which provides the theoretical basis of empirical analysis.This specification of theoretical framework is also one of the innovations of this research(Chapter 3)(2)Empirical explorationThis thesis chooses different dimensions of "salience" in three typical decision-making contexts,i.e.,language cognition,information judgment and sequential decision,for empirical designing and measurement.Experimental experiments were adopted to provide empirical evidences for understanding the mechanism of biased judgment and decision-making from the framework of cognitive sampling.The major work and findings derived from empirical studies are below:? Word recall experimentThis experiment is conducted to test the impact of distribution salience and emotion salience of a word on individuals' memory recall(sampling).This experiment focuses on the first stage of cognitive sampling framework and specifically examines the two dimensions of salience of the external word stimulates' perception characteristics,that is,distribution salience and emotion salience of a word.The experiment results show that the high frequency words in the environment have higher salience than the low frequency words;emotional words(positive and negative)are more salient than neutral words;negative emotional words are more salient than positive emotional words;words with high salience are more likely to be accurately recalled and recognized by individuals,thus being critical decision samples that impact decision making.(Chapter 4)? Information judgment experimentThis experiment is conducted to explore how individuals holding different prior attitudes sample and evaluate the pro and con messages regarding a specific topic,finding strong evidence of the biasing impact of prior attitude salience on individuals information processing.This experiment focuses on the influence of salience on both two stages of cognitive sampling framework.In the first stage,we examine the impact of salience of prior attitude on individuals'selection among multiple messages.In the second stage,we examine the impact of salience of prior attitude on individuals'evaluation of the informativeness and credibility of the message.The experiment results reveal that the salience of prior attitude plays an important role in the process of attitude development.Individuals sample more information from their own attitudes,instead of the attitude advocated by a message;and in the process of information evaluation,the prior salience makes individuals distort perception of message attitude towards its own attitude,give higher evaluation of the informativeness of the message that is consistent with his own attitude and prefer to recall these messages in subsequent judgments.(Chapter 5)? Sequential decision-making experimentThis experiment is conducted to tested the biasing impact of risk information salience(the completeness of decision information provided by external environment)and individual's memory ability on individuals' risk assessment and selection preference.This experiment focuses on the second stage of cognitive sampling framework,this is,the risk assessment of optional alternatives in the scenery of sequential decision-making.It is shown that the lower the risk information salience is,the stronger the bias in the sequential learning and decision-making will be.Specifically,the convergence rate becomes slower,the convergence range deviates from the actual gain probability bigger,and the estimated gain probability deviates the option's actual gain probability greater in the lower risk information salience.The biasing effect caused by the salience of the risk information is regulated by individual's memory ability.When the external environment eliminates the limitation of the individual memory ability(providing the longitudinal historical gain information),the decision-making bias is obviously reduced which concrete in the faster convergence rate,the closer convergence range to the actual gain probability,and the weakened estimation deviation of the gain probability of the option.(Chapter 6)Through three empirical studies,this thesis examines the mechanism of "salience?biased samples?biased judgment and decision-making" from different dimensions of salience under different decision context.The empirical studies provide a meaningful reference for adopting a laboratory experiment method to manipulate the dimensions of salience,identify the stage and process of the cognitive sampling,design the measurement of biases,and examine the interaction of environment and memory schema,etc.(3)Management applicationsFinally,based on the experiment results and literature survey,this thesis analysis the salience-driven decision biases in financial market,consumer decision-making,judicial decision and tax policy,to provide practical implications for optimizing the individuals'decision from the perspective of salience and cognitive sampling,and to transform individuals'limited rationality into favorable factors for management decision-making.This part is a concentrated expression of the practical significance of this research.(Summary of the three empirical studies and chapter7).