Perspectives on Probability Judgment Calibration

Griffin, Dale W.; Brenner, Lyle

doi:10.1002/9780470752937.ch9

Cited by 92 publications

(80 citation statements)

References 64 publications

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“…Beside this, no further comparison is significant. Note, that there is a large literature on overconfidence, which results in people reporting too narrow intervals on average (Lichtenstein et al (1982), Griffin and Brenner (2004)). This general tendency may be at work here and it is possible that it cancelled out any systematic overestimation of outcome variability.…”

Section: Results: Estimation Of Summary Statisticsmentioning

confidence: 99%

Investment Decisions and Time Horizon: Risk Perception and Risk Behavior in Repeated Gambles

2005

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To investigate the effect of time horizon on investment behavior, this paper reports the results of an experiment in which business graduate students provided certainty equivalents and judged various dimensions of the outcome distribution of simple gambles that were played either once or repeatedly for 5 or 50 times.Systematic mistakes in the ex-ante estimations of the distributions of outcomes after (independent) repeated plays were observed. Despite correctly realizing that outcome standard deviation increases with the number of plays, respondents showed evidence of Samuelson's (1963) fallacy of large numbers. Perceived risk judgments showed only low correlations with standard deviation estimates, but were instead related to the anticipated probability of a loss (which was overestimated), mean excess loss, and the coefficient of variation. Implications for future research and practical implications for financial advisors are discussed. * We are grateful to an associate editor, two anonymous referees, Markus Glaser, and seminar participants at the University of Mannheim for helpful comments and suggestions. Financial support from the Deutsche Forschungsgemeinschaft, Sonderforschungsbereich 504, at the University of Mannheim, is gratefully acknowledged.

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Section: Results: Estimation Of Summary Statisticsmentioning

confidence: 99%

Investment Decisions and Time Horizon: Risk Perception and Risk Behavior in Repeated Gambles

2005

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“…An important and well-studied aspect of subjective probabilities is their accuracy (see Arkes, 2001;Griffin & Brenner, 2004;Koehler, Brenner, & Griffin, 2002;McClelland & Bolger, 1994). The focus on accuracy is well-deserved.…”

Section: Accuracy Of Confidence Ratingsmentioning

confidence: 99%

Two-stage dynamic signal detection: A theory of choice, decision time, and confidence.

Pleskac¹,

Busemeyer²

2010

Psychological Review

677

947

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The 3 most often-used performance measures in the cognitive and decision sciences are choice, response or decision time, and confidence. We develop a random walk/diffusion theory-2-stage dynamic signal detection (2DSD) theory-that accounts for all 3 measures using a common underlying process. The model uses a drift diffusion process to account for choice and decision time. To estimate confidence, we assume that evidence continues to accumulate after the choice. Judges then interrupt the process to categorize the accumulated evidence into a confidence rating. The model explains all known interrelationships between the 3 indices of performance. Furthermore, the model also accounts for the distributions of each variable in both a perceptual and general knowledge task. The dynamic nature of the model also reveals the moderating effects of time pressure on the accuracy of choice and confidence. Finally, the model specifies the optimal solution for giving the fastest choice and confidence rating for a given level of choice and confidence accuracy. Judges are found to act in a manner consistent with the optimal solution when making confidence judgments.

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“…The performance score is 1 minus the absolute value of the difference between (mean) confidence and knowledge (percent correct) across all items. The overconfidence often observed in this type of task has been explained in various ways (see Griffin & Brenner, 2004). …”

Section: A Study On the Memory-decision Making Relationship: Aims Andmentioning

confidence: 99%

The Multifold Relationship Between Memory and Decision Making: An individual-differences study

Missier¹,

Bruin²,

Nilsson³

et al. 2012

PsycEXTRA Dataset

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Several judgment and decision-making tasks are assumed to involve memory functions, but significant knowledge gaps on the memory processes underlying these tasks remain. In a study on 568 adults between 25 to 80 years, hypotheses were tested on the specific relationships between individual differences in working memory, episodic memory, and semantic memory, respectively, and six main components of decision-making competence. In line with the hypotheses, working memory was positively related with the more cognitively-demanding tasks (Resistance to Framing, Applying Decision Rules, and Under/Overconfidence), whereas episodic memory was positively associated with a more experience-based judgment task (Recognizing Social Norms). Furthermore, semantic memory was positively related with two more knowledge-based decision-making tasks (Consistency in Risk Perception and Resistance to Sunk Costs). Finally, the age-related decline observed in some of the decision-making tasks was (partially or totally) mediated by the age-related decline in working memory or episodic memory. These findings are discussed in relation to the functional roles fulfilled by different memory processes in judgment and decision-making tasks.Keywords: Judgment and decision making; Decision-making competence; Working memory; Episodic memory; Semantic memory; Cognitive aging; Individual differences. MEMORY AND DECISION MAKING 3The Multifold Relationship Between Memory and Decision Making: An Individual-differences Study Among the more promising research developments in the field of judgment and decision making is the attempt to ground judgment and decision-making processes in findings and models derived from memory research, tracing complex cognitive tasks back to their basic cognitive roots to improve the understanding of how individuals perform these tasks. Indeed, memory can play an important role in several aspects of judgment and decision-making tasks (for reviews see, e.g., Alba, Hutchinson & Lynch, 1991;Dougherty, Gronlund & Gettys, 2003;Tomlinson, Marewski & Dougherty, 2011;Weber, Goldstein & Barlas, 1995), and the age-related decline observed in some aspects of memory functioning (Park, 2000;Park et al., 1996Park et al., , 2002Salthouse, 2004) can mediate part of the age-related changes in decision-making abilities. However, the investigation of the role of memory functions in decision making has been scattered and nonsystematic, leaving various knowledge gaps about which memory functions underly specific decision-making tasks open. The study presented in this paper aims to fill some of these gaps through a systematic analysis of the relationships between individual differences in memory processes and individual differences in various aspects of decision-making competence, guided by a functional view of memory processes in decision making.In the next section, the theoretical background of the research will be presented, followed by the specific hypotheses of the study, which refer to the contribution of different memory processes to ...

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Perspectives on Probability Judgment Calibration

Cited by 92 publications

References 64 publications

Investment Decisions and Time Horizon: Risk Perception and Risk Behavior in Repeated Gambles

Investment Decisions and Time Horizon: Risk Perception and Risk Behavior in Repeated Gambles

Two-stage dynamic signal detection: A theory of choice, decision time, and confidence.

The Multifold Relationship Between Memory and Decision Making: An individual-differences study

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