OVERCONFIDENCE?
One of the most enjoyable types of academic exchange is that of type 17a, in which one group of scholars argues that a psychological tendency is irrational and another group argues that the same tendency is reasonable. It can be even more fun when the groups belong to different fields. If these two assertions are true, we are in for a treat this week as DSN has become aware of a working paper by economists Jean-Pierre Benoît (London Business School) and Juan Dubra (Montevideo) that finds nothing wrong with the idea that most people rate themselves above average.
ABSTRACT
Many studies have shown that people display an apparent overconfidence. In particular, it is common for a majority of people to describe themselves as better than average. The literature takes for granted that this better-than-average e¤ect is problematic. We argue, however, that, even accepting these studies completely on their own terms, there is nothing at all wrong with a strict majority of people rating themselves above the median.
LINK
Overconfidence? http://www.najecon.org/naj/cache/122247000000002148.pdf
It is interesting to see the term “nothing wrong” in the abstract. Decision Science News enjoys papers of type 17a, but it feels that there is too much focus on what is rational / irrational / right / wrong and too little focus on models that capture what people do: the overconfident, the underconfident, and the calibrated. After all, right or wrong are all defined with respect to normative standards, and such norms 1) change over time and 2) are often borrowed from fields (such as probability and statistics), that don’t speak with a single normative voice, but comprise multiple (often irreconcilable) views.
Figure credit: Pilot study by Lionel Page and Dan Goldstein
JDM PRE-CONFERENCE AT SPSP IN TAMPA
The 4th Annual Judgment and Decision Making Pre-Conference at the meeting of the Society for Personality and Social Psychology (SPSP) will be held February 5, 2009 in Tampa, FL.
*Poster deadline has been extended until Monday, December 1st.* Poster presentation submissions are now being accepted via our website
http://www.socialthinking.org/jdm.html
Ten $200 Student Travel Awards are available to graduate students who are first authors on a poster.
The deadline to register for the conference is January 1st, 2009. For further information, please visit our website: http://www.socialthinking.org/jdm.html
The JDM preconference highlights the emerging nexus of social-personality, judgment, and decision making research. The program consists of invited addresses and a poster session.
Invited Speakers
Gretchen Chapman
Ayelet Fishbach
Chris Hsee
Arie Kruglanski
Rick Larrick
David Schkade
Leaf Van Boven
Kathleen Vohs
This year’s JDM Pre-Conference organizers are happy to field further questions.
Peter McGraw, University of Colorado, Boulder
Rebecca Ratner, University of Maryland
Neal Roese, University of Illinois
Kelly See, New York University
SOCIETY FOR JUDGMENT AND DECISION MAKING (SJDM) AND BRUNSWIK CONFERENCES 2008
It’s not too late to hit the SJDM conference in Chicago (reception Nov 14, conference 15-17th, 2008). If you’re in town early enough (Nov 13-14th, 2008), you may be able to get into the Brunswik Society.
Where:
The Chicago Hilton, Chicago, IL
720 South Michigan Avenue
Tel: 1-312-922-4400
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Brunswik Conference:
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As usual, Decision Science News will be there, covering all the decision-making action. (Ok, the “talking about decision-making” action).
TEST YOUR KNOWLEDGE OF THE INCOME DISTRIBUTION
Think you know it all? A good deal of decision-making research centers around people’s abilities to make accurate estimates and inferences.
Those who like to test their knowledge might be interested in this fun video game / Web experiment put together by Decision Science News and Lionel Page.
In it, you get to enter your beliefs about the inequality of income in the USA, and at the end, you can find out how accurate you were. Fun!
Give it your best shot at: http://www2.decisionresearchlab.com/db/hi/
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OPT-IN TO OPIM
The OPIM Department at the Wharton School is home to faculty with a diverse set of interests in decision-making, information technology, information strategy, operations management, and operations research. We are seeking applications for tenure-track positions starting in the 2009-2010 academic year. Applicants must have the potential for excellence in research and teaching in the OPIM Department’s areas of concern. Rank is open. A Ph.D. is required.
Applications consisting of PDF files with (i) a one-page cover letter (ii) a resume or CV(iii) at least one research paper(iv) three contacts for letters of recommendation (v) a list of any upcoming conferences at which you plan to present your work should be entered at: http://opim.wharton.upenn.edu/home/recruiting.html.
The department will begin reviewing applications on November 17, 2008. To ensure full consideration, materials should be received by November 17th, but applications will continue to be reviewed until appointments are made.
The University of Pennsylvania is an Equal Opportunity Employer. Minorities, females, individuals with disabilities, and veterans are encouraged to apply.
INCREASE VOTER TURNOUT AMONG STUDENTS
Columbia University’s Eric Johnson and Elke Weber have created Teachers4Turnout, a Web site / classroom activity to encourage voting among students. Check it out at http://www.teachers4turnout.org. Here’s how they describe it:
The upcoming election is important to us, but even more important to our students. Decisions made by those officials who will be elected November 4th will affect the future of the country that our students will inherit. Our goal is to increase student participation in the electoral process. Studies show that we can increase voting substantially with a simple question: Merely asking students if they will be voting increases turnout, by getting their commitment to vote.
After you sign up, you will find a suggested script that is designed to encourage voting. This should take less than 5 minutes of class time. We will also send you no more than two reminder emails and ask you, after election day, how things went. That’s all.
Please help spread the word by forwarding this message to colleagues who also teach voter-age populations. With your help, we can make Teachers4Turnout a national success, and help our students vote.
Those interested in the latest behavioral research on increasing voter turnout might wish to read Nudging turnout: Mere measurement and implementation planning of intentions to vote by the international team of Dan Goldstein (London), Kosuke Imai (Princeton), Anja Göritz (Würzburg), and the Peter Gollwitzer (NYU).
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BANK FAILURE AND BLACK SWANS
Fully aware of the Nostradamus effect and every “cognitive fallacy” under the sun, Decision Science News does have to hand it to Nassim Taleb for warning about the domino effect we’re now seeing in banking.
Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur … I shiver at the thought.” From Taleb, N. N. (2006). The Black Swan.
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DECISION SCIENCE NEWS HEADING TOWARD 1000 SUBSCRIBERS
This 100 day moving average of RSS subscriptions to Decision Science News seems to suggest that readership is up, though one cannot know for sure without conducting elaborate significance tests. The site currently gets 3000 hits per day.
Decision Science News was created in 2004 as a kind of external memory of conference dates for its editor and a handful of professors and graduate students in the once-obscure field of judgment and decision making, so this is rather unexpected.
“Hits” refers to people visiting the site directly through their browser. RSS subscribers, shown in the graph, refer to the number of people who get the sites’ content delivered by RSS feed reader or by email. If you are not subscribed, you may do so in a couple easy ways.
The first is to copy the link under the big orange icon under the word “SUBSCRIBE” in the right margin and then paste it into an RSS feed reader, such as Google Reader, Bloglines (or Bloglines beta), or Netvibes.
The second is to subscribe by email. Just type your email in the box under the words “Get new posts by email”, also in the right hand margin. Once you fill out the verification form, you’ll receive an email that will allow you to confirm your subscription. (If you don’t get it, check your junk mail folder). As the box promises, you can easily unsubscribe yourself anytime.
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DE GUSTIBUS NON EST DISPUTANDUM?
This post got us thinking about chart critique. Charts are things we like to judge, as graph rating systems, and the name of the blog Junk Charts suggest.
What we wonder is will science ever be able to separate chart opinions from chart knowledge? Chart doxa from chart episteme? Consider that the Napolon’s March (above), so celebrated by chart guru Tufte
, is detested by chart guru Kosslyn
.
The Decision Science News editor cannot help but be reminded of teaching acting, which he did professionally for a dozen years. Actors make decisions while acting teachers take notes, and the notes usually take the form of “good move there”, “bad move there”, or “questionable move there”.
While acting is an art, one can learn to discriminate between good, bad, and questionable choices. This is because teachers make predictions and get feedback as to whether these predictions are correct.
A bad choice has been identified correctly if the scene falls flat two minutes later (as judged by everybody in the room, including the people acting in it). A questionable choice has been identified correctly if, two minutes later, some of the room liked it and the rest didn’t. A good choice has been identified correctly if, two minutes later, everybody says “excellent move there!”.
The reader might be thinking, yes, but isn’t good and bad acting just a matter of taste? Two responses. First, not as much as you might think when dealing with people learning to act. Mistakes just pop out, like a beginning clarinetist squeaking their reed. Second, there are questions of taste, and those are the ones that divide the audience reacation. The clearly good and bad moves are plain to see.
(By the way, actors who make bad choices almost never get work. They have trouble getting agents, and even if they do, with hundreds people trying for each paying job, they never get past the audition phase. A lot of prize-winning actors split the public opinion. A lot of actors who always make good choices never get a nod, though they do get steady work).
So, in acting, we can use the reaction of the room as a measurement. But in statistics, the science of measurement, there doesn’t seem to be as clear a criterion. Fields like Interaction Design may suggest good candidates, such as the number of milliseconds it takes to answer a question based on a chart, the correctness of answers based on people reading the chart, and so on. Can there ever be such a thing as expertise in judging what constitutes good, bad, and questionable choices in chart design?
ADDENDUM
David Weiss and Jim Shanteau have proposed a solution to the problem we pose above. See the comment below and this paper in Human Factors, and this one in the Journal of Behavioral Decision Making.
