Decision Science News

PRECONFERENCE ON JDM @ SPSP 2007

The Society for Personality and Social Psychology annual conference will host its second-ever judgment and decision making preconference Thursday, January 25, 2007 in Memphis, the home of Elvis Presley. While we are dropping names we should mention that the speakers are:

• Elke Weber
• Nira Liberman
• Max Bazerman
• Linda Babcock
• Dick Thaler
• Eldar Shafir
• Dan Ariely
• Ap Dijksterhuis

and that the conference is organized by Ayelet Fishbach, Justin Kruger, Peter McGraw, and Neal Roese. For more information, see the official announcement.

Deadline to submit posters is November 15th, 2006.

Photo credit: http://www.flickr.com/photos/litmuse/75068307/

STIGLER’S LAW OF EPONYMY

Statistician and Historian of Science Stephen Stigler told Decision Science News about a useful law. Stigler’s Law of Eponymy: No scientific discovery is named after its original discoverer.

This useful principle helps one think twice before attributing a “named” statistical construct to the person for which it is named. Gaussian distributions, for instance, might better be called de Moivrian distributions, for Abraham de Moivre.

Does Stigler’s law apply to Stigler’s law? Of course, Stigler is clever. He apparently attributes the law to Robert K. Merton.

HEURISTICS AND THE LAW

Decision Science News is proud to be a part of the recently release by MIT Press Heuristics and the Law, edited by Gerd Gigerenzer and Christoph Engel.

QUOTE FROM CASS SUNSTEIN, UNIVERSITY OF CHICAGO

“An excellent collection, and an important contribution to exciting new work at the intersection of psychology, economics, and law. Highly recommended for everyone interested in knowing how people really behave–and in understanding how actual behavior affects the law”

QUOTE

“In recent decades, the economists’ concept of ration choice has dominated legal reasoning. And yet, in practical terms, neither lawbreakers nor officers of the law behave as the hyperrational beings postulated by rational choice. Critics of rational choice and believers in “fast and frugal heuristics” propose another approach: using certain formulations or general principles (heuristics) to help navigate in an environment that is not a well ordered setting with an occasional disturbance, as described in the language of rational choice, but instead is fundamentally uncertain or characterized by an unmanageable degree of complexity. This is the intuition behind behavioral law and economics.”

CONTRIBUTING AUTHORS

Ronald J. Allen, Hal R. Arkes, Peter Ayton, Susanne Baer, Martin Beckenkamp, Robert Cooter, Leda Cosmides, Mandeep K. Dhami, Robert C. Ellickson, Richard A. Epstein, Wolfgang Fikentscher, Axel Flessner, Robert H. Frank, Bruno S. Frey, Paul W. Glimcher, Daniel G. Goldstein, Chris Guthrie, Jonathan Haidt, Reid Hastie, Ralph Hertwig, Eric J. Johnson, Jonathan J. Koehler, Russell Korobkin, Stephanie Kurzenhäuser, Douglas A. Kysar, Donald C. Langevoort, Richard Lempert, Stefan Magen, Callia Piperides, Jeffrey J. Rachlinski, Clara Sattler de Sousa e Brito, Joachim Schulz, Victoria A. Shaffer, Indra Spiecker genannt Döhmann, John Tooby, Gerhard Wagner, Elke U. Weber, and Bernd Wittenbrink.

GUPTA AND LEHMANN WIN WITH MANAGING CUSTOMERS AS INVESTMENTS

The 2006 Berry-AMA Book Prize for the best book in marketing goes to Sunil Gupta and Don Lehmann’s Managing Customers as Investments: The Strategic Value of Customers in the Long Run.

The other nominees were:

• Don’t Just Relate – Advocate: A Blueprint for Profit in the Era of Customer Power (Wharton School Publishing), by Glen Urban
• Effective Advertising: Understanding When, How, and Why Advertising Works (Sage Publications), by Gerard J. Tellis
• Hispanic Marketing: A Cultural Perspective (Elsevier Butterworth-Heinemann), by Felipe and Betty Ann Korzenny
• Return on Customer: Creating Maximum Value from your Scarcest Resource (Doubleday), by Don Peppers and Martha Rogers
• Social Marketing in the 21st Century (Sage Publications), by Alan R. Andreasen.

CAN RECOGNITION HAPPEN WITHOUT RECALL?

An important question to those studying neuroeconomics, as well as those studying heuristics such as the recognition heuristic is whether recognition is just a side-effect of recall, or whether recognition is a separate process. In consumer behavior, we wonder if the brain changes patterns of activation in the presence of recognized brands, and if this primitive recognition is used to make inferences in conjunction with (or instead of) recalled information.

A recent paper in Neuropsychology by Westerberg et al finds, using impairment data, that mere recognition (recognition without further recall) and recollection (recognition judgments made by recalling episodes or source memory) are separate systems. Recollection fails under hippocampus impairment (Alzheimer’s disease) but mere recognition remains unimpaired.

“Recognition can be guided by familiarity, a restricted form of retrieval devoid of contextual recall, or by recollection, which occurs when retrieval is sufficient to support the full experience of remembering an episode…Remarkably, forced-choice recognition was unequivocally normal in patients with MCI (Mild Cognitive Impairment) compared with age-matched controls. Neuropathology in hippocampus and entorhinal cortex, known to be present in MCI, presumably disrupted recollection while leaving familiarity-based recognition intact.”

“In conclusion, the present results indicate that in patients with diagnoses of AD (Alzheimer’s Disease) or MCI [Mild cognitive Impairment], familiarity is relatively preserved compared with recollection. Impaired yes-no recognition in AD and MCI is consistent with prior results suggesting that damage to the hippocampus impairs recollection (e.g., Holdstock et al., 2002). The remarkable findings that forced-choice recognition is relatively intact in AD and entirely intact in MCI provide insights into the critical neural substrates of familiarity signals. Neural processing that supports familiarity may include contributions from perirhinal cortex, from multiple medial temporal regions that are partially damaged but nonetheless can continue to support familiarity, and/or from structures outside the medial temporal region.”

One would assume that in situations where the hippocampus and entorhinal cortex are impaired or cannot do their job for other reasons, recollections (such as remembering where you recognize something from) that might cause someone to decide against using the recognition heuristic might not have an effect.

Reference: Westerberg, C.E., Paller, K.A., Weintraub, S., Mesulam, M.-M, Holdstock, J.S., Mayes, A.R., & Reber, P.J. (2006). When memory does not fail: Familiarity-based recognition in mild cognitive impairment and Alzheimer’s disease, Neuropsychology, 20, 193-205.

Photo: http://www.flickr.com/photos/odelot/254015955/

ONLINE BEHAVIORAL RESEARCH ROUNDTABLE AT ACR

Photo courtesy of Matt Coats (click for video).

Collecting data over the Internet seems like a solution to all an experimentalist’s problems. Responses can be collected from the far corners of the world, from people in all walks of life. Experiments that would take months can now be carried out in days. But ours is not an ideal world. Researchers wrestle with fickle software, challenges to experimental design, and a host of other problems.

Attendees of the Association for Consumer Research conference can attend a roundtable discussion on psychological research on the Internet and how to do it better. The roundtable takes place 8 – 9:30 AM Saturday, September 30th in the Nomeus room of the Renaissance Orlando Resort at SeaWorld, 6677 Sea Harbor Dr, Orlando, FL 32821-8092.

This roundtable gathers together six leading Web-based researchers to share tips and long-run strategies for building, running, and maintaining an online laboratory. The panelists are all experienced Web-based researchers themselves:

• On Amir – University of California-San Diego
• Dan Goldstein – London Business School
• Gerald Häubl – University of Alberta
• Donna Hoffman – University of California-Riverside
• Eric Johnson – Columbia University
• Leonard Lee – Columbia University
• Tom Novak – University of California-Riverside

The topics covered are some burning ones:

• Online lab construction
• Subject recruitment
• Panel management
• Payment
• Fraud
• Data cleaning
• Online experimental design and integrity

Conference attendees of all levels of experience are encouraged to attend.

IMPROVISED TASTES

Ever a students of improvisation, we are happy that Sarah Lichtenstein and Paul Slovic’s new edited volume The Construction of Preference is now out in earth-toned paperback, and that DSN editor’s modest contribution has made the cut.

BLURB
One of the main themes that has emerged from behavioral decision research during the past three decades is the view that people’s preferences are often constructed in the process of elicitation. This idea is derived from studies demonstrating that normatively equivalent methods of elicitation (e.g., choice and pricing) give rise to systematically different responses. These preference reversals violate the principle of procedure invariance that is fundamental to all theories of rational choice. If different elicitation procedures produce different orderings of options, how can preferences be defined and in what sense do they exist? This book shows not only the historical roots of preference construction but also the blossoming of the concept within psychology, law, marketing, philosophy, environmental policy, and economics. Decision making is now understood to be a highly contingent form of information processing, sensitive to task complexity, time pressure, response mode, framing, reference points, and other contextual factors.

CONTENTS
Part I. Introduction; Part II. Preference Reversals; Part III. Psychological Theories of Preference Reversals; Part IV. Evidence for Preference Construction; Part V. Theories of Preference Construction; Part VI. Affect and Reason; Part VII. Miswanting; Part VIII. Contingent Valuation; Part IX. Preference Management.

CONTRIBUTORS
Dan Ariely, Max H. Bazerman, James R. Bettman, Sally Blount, Jerome R. Busemeyer, Melissa L. Finucane, Baruch Fischhoff, Daniel T. Gilbert, Daniel G. Goldstein, Robin Gregory, David M. Grether, Sara D. Hodges, Keith J. Holyoak, Christopher K. Hsee, Sheena S. Iyengar, Ryan K. Jessup, Eric J. Johnson, Joseph G. Johnson, Daniel Kahneman, Kristen J. Klaaren, Daniel C. Krawczyk, Suzanne J. LaFleur, Mark R. Lepper, Sarah Lichtenstein, Douglas J. Lisle, George Loewenstein, Mary Frances Luce, Donald G. MacGregor, Douglas MacLean, Naomi Mandel, Henry Montgomery, Stephen M. Nowlis, John W. Payne, Ellen Peters, Charles R. Plott, Drazen Prelec, Matthew Rabin, Daniel Read, Ilana Ritov, Yuval S. Rottenstreich, Samuel Sattath, David A. Schkade, Jonathan W. Schooler, Eldar Shafir, Dan Simon, Itamar Simonson, Paul Slovic, Cass R. Sunstein, Ola Svenson, Richard H. Thaler, Amos Tversky, Elke U. Weber, Timothy D. Wilson, Yiheng Xi, Frank Yu, Robert B. Zajonc, Jiao Zhang

FROM INTERNET SOURCES, IN ALPHABETICAL ORDER, WITH NO CLAIMS OF A COMPLETE LIST

Applied Econometric Time Series, W. Enders, 1995, New York, John Wiley & Sons.

Elements of Statistical Learning, T. Hastie, R. Tibshirami, and J Friedman, 2001, New York, Springer.

Categorical Data Analysis, (2nd ed.), Agresti, A. New York: John Wiley & Sons, 2002.

Methods of Multivariate Analysis, A. Rencher, 2002, New York: John Wiley & Sons.

Modern Regression Methods, Ryan, T.P. 1997. New York: Wiley.

Statistical Analysis With Missing Data, (2nd ed.), Roderick J., A. Little, and Donald B. Rubin. New York: John Wiley & Sons, 2002.

Statistical Methods for Reliability Data, W. Meeker and L. Escobar, 1998, New York: John Wiley & Sons.

Subjective and Objective Bayesian Statistics: Principles, Models,and Applications, (2nd ed.), Press, S. J. New York: John Wiley & Sons, 2003.

Testing Statistical Hypotheses of Equivalence, Wellek, S. Boca Raton, Fla.: Chapman & Hall/CRC, 2003.

What are the Chances? Voodoo Deaths, Office Gossip, and other Adventures in Probability, Holland, B.K. 2002. Baltimore, Md.: The Johns Hopkins University Press.

If you’re not a quant, you might want to start with the last one, by Holland.

DEFAULTS DO MATTER

Decision Science News and Eric Johnson have teamed up once again to write a piece for the Financial Times on the suprisingly powerful effect of defaults (even simple software defaults) on decisions, from the routine to the life-changing. Their conclusion? History gets written by default. The piece is called “The daily defaults that change lives” and you can read it here.

LEGERDEMAIN

Last year, DSN was grateful when the eight-figure-endowment Decision Science News Foundation won the bidding war for Decision Science News Tower (pictured). This year, we are pleased to announce that The Foundation has extended additional funds to provide a private domain name: decisionsciencenews.com

News readers who use newsreaders will be glad to know there is a new RSS feed as well: