Decision Science News

WHAT MAKES JDM DISTINCT?

A friend of Decision Science News, who is co-organizing a session on JDM (judgment and decision making research) for students, recently emailed a handful of JDM researchers:

Those of us in the JDM session are doing quite different research and couldn’t really see how we were more “JDM” than, say, someone doing “cognition”, which lead us to the question “What is JDM?”

If you have a few minutes in the next couple days to just shoot me a note about what makes JDM distinct, I’d really appreciate your thoughts. My goal is to give students a couple different (anonymous, of course) opinions about what JDM is from people more senior than those of us in the session.

Here is the opinion that Decision Science News gave:

This post from Decision Science News, based on a text analysis of conference programs, gives some insight into how what is currently being done in JDM is distinct from Social Psych

http://www.decisionsciencenews.com/2010/02/15/the-difference-between-spsp-and-sjdm/

Also, the first list does a pretty good job of showing the core topics of JDM: risk, uncertainty, choice, decision, probability, prediction, future, intertemporal choice. Missing from the list would be: heuristics, utility, forecasting, normative models, prescriptive models, and descriptive models.

The Society for Judgment and Decision Making (SJDM) was formally formed in 1986 (from a core who had been meeting less formally before that) and I’ve heard it was basically people interested in the exciting field of research opened up by Tversky & Kahneman. Their 1974 Science article still touches upon much of what is done today.

The oldest President’s letter to be found online, written by Barbara Mellers in 1996, speaks of “almost five decades” of JDM research, which would point to somewhere in the late 1940s. Well after Brunswik, a few years after Von Neumann and Morgenstern’s “Theory Games and Economic Behavior” and a few year’s before Ward Edward’s Psychological Bulletin article “The theory of decision making”, the abstract of which is (emphasis added):

This literature review of decision making (how people make choices among desirable alternatives), culled from the disciplines of psychology, economics, and mathematics, covers the theory of riskless choices, the application of the theory of riskless choices to welfare economics, the theory of risky choices, transitivity of choices, and the theory of games and statistical decision functions. The theories surveyed assume rational behavior: individuals have transitive preferences (“… if A is preferred to B, and B is preferred to C, then A is preferred to C.”), choosing from among alternatives in order to “… maximize utility or expected utility.”

And Meller’s President’s letter (emphasis added) describes what she saw as the big topics (in addition to her opinions about the focus, which we won’t touch upon here):

For almost five decades, researchers in judgment and decision making have explored human errors in judgment and choice. We have documented instances in which people violate fundamental principles and axioms. We have discovered cases in which people disobey the most basic rules of statistics, probability, and logic. We have identified factors that should be irrelevant, but aren’t, such as the response mode, the problem representation, and the decision frame.

What are the legacies of this research? We have probed the boundaries of human rationality. We have discovered important limitations of cognitive processing, and we understand how poor judgment makes people their own worst enemies. But somewhere along the way, we lost sight of everything else.

While walking across campus to a colloquium one afternoon, a colleague asked me whether the speaker was a member of the JDM Society. When I told him “yes,” he said, “Then give me a quick preview. What is the error of the day?” He was perfectly serious. We are well known for setting traps and taking delight at human failure.

Haven’t we reached the point of diminishing returns? Demonstrations of one more error for the sake of an error, or one more violation for the sake of a violation, are nothing new. Not only are they not new, they add to an already lopsided view of human competence. We need theories of decision making that predict not only errors, biases, and violations of axioms, but also broader themes of psychological and social functioning. We know very little about the effects of emotions on choice. We know very little about the relationships between decision making and signal detection, memory retrieval, or categorization. Not only that, we know very little about the impact of social context. Why are certain errors, and not others, attenuated in experimental markets, and possibly other institutional settings?

One of the reasons we may have become so preoccupied with errors is because we applied to our descriptive theories the organizing principles from our normative theories. In normative theories, we classify decisions depending on the assignment of probabilities to states of nature (decision making under certainty, risk, uncertainty, or conflict), and these categories may not be optimal for descriptive theorizing. In the animal literature, decisions are often classified on the basis of the animal’s activities, such as foraging and mating. Perhaps functional distinctions might be appropriate in the human literature as well. How often have you heard complaints that our theories apply to purchasing decisions, but not decisions about marriage or children? How often have you heard complaints that our theories of gambles don’t generalize to medical treatments, job opportunities, or even vacation sites? Perhaps the missing links in our descriptive theories would become more apparent with a different set of organizing principles that highlight our activities, goals, and desires.

We have gotten a great deal of mileage out of errors. Decision making is discussed in many psychology texts. It is also cited in marketing, organizational behavior, political science, and microeconomics texts. Philosophers, economists, and statisticians are also developing richer and more interesting definitions of rationality. Finally, psychologists have begun to study human strengths as well as human weakness, and this work should have important consequences for artificial intelligence systems designed to complement and aid human decision making.

To have a lasting impact, we should continue to go beyond errors, mistakes, and other human failures and adopt a broader perspective. As John Locke said, “It is one thing to show a man that he is in error, and another to put him in possession of the truth.”

The point is, for better or for worse, the majority of JDM research has always been about the difference between formalisms and human behavior. The formalisms are drawn from economics, mathematics, and psychology as Edwards said, and I’d guess that the following list of formal models (with examples of JDM research areas in parens) is close to complete:

• probability (base-rate neglect / conservatism, confidence),
• logic (Wason selection task),
• subjective expected utility (Prospect Theory, Support Theory),
• choice axioms (Independence of irrelevant alternatives, attraction / compromise effects)
• statistics
  • sampling (Representativeness, law of small numbers, probability weighting, decisions from experience)
  • inference (lens model, fast&frugal heuristics)
  • estimation (Availability, Anchoring, risk perception)

Outside of this, there is a bit of descriptive work (Naturalistic DM, individual differences) and a bit of prescriptive work, though the latter is usually taken up in the field known as Decision Analysis. Like Mellers quite a few JDM researchers have not been happy with the organization around axiomatic norms, but if we are to define JDM by what it is has primarily been in the past, this generalization is hard to deny.

Since Meller’s letter, attention has moved from documenting differences to building more formal models of what people do, with Prospect Theory being the field’s most successful export.

As to the differences with Social Psychology, I think the blog post above addresses the differences in current practice.

As to the differences with Cognitive Psychology, Barsalou’s textbook puts JDM as a field within Cognitive Psychology and I think this is right: judging, choosing, and deciding are thought processes. Cognitive Psych is defined as covering perception, memory, thinking, language, and problem solving. Barsalou’s chapters are: categorization, representation, executive control, working memory, long-term memory, knowledge, language structure, language process, and thought. JDM typically falls under “thinking” / “thought”.

If forced to choose two books that represent what the field is about, I’d go with:

• Rational Choice In An Uncertain World, by Reid Hastie and Robyn M. Dawes
• Judgment under Uncertainty: Heuristics and Biases, edited by Daniel Kahneman, Paul Slovic, Amos Tversky

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