Transcript Slide 1

INFM 718A / LBSC 705
Information For Decision Making
Lecture 13
Selective Perception
One Perspective
• “We do not first see, then define,
we define first and then see.”
Walter Lippmann (quoted in Plous,
1993.)
Selective Perception
• Perception is affected by expectations.
• Bruner and Postman’s (1949)
experiments.
• What did they find?
Normal Cards vs. Trick Cards
• Trick cards had wrong (inverse) colors,
such as a black three of hearts. (Check
the cover of the Plous book.)
• Bruner and Postman found that it took
people about four times longer to
recognize the trick cards than normal
cards.
Four Strategies to Cope
• Dominance
• Compromise
• Disruption
• Recognition
Dominance
• These people saw a red three of hearts or
a black three of spades.
• In the first case form is dominant and color
is fit to expectation; in the second case vice
versa.
• Bruner and Postman called this “Perceptual
Denial.”
Compromise
• These people reported a red six of spades
as a purple six of spades (or of hearts).
• A black four of hearts was reported as a
greyish four of spades. A red six of clubs
was reported as “six of clubs illuminated
by red light.”
• 50% showed compromise behavior to red
trick cards; 11% to black trick cards.
Disruption
• Some people had trouble forming any
perception at all.
• Disruption was rare but quite dramatic.
Recognition
• Some people recognized that there was a
problem.
• Even then, some failed to correctly identify
what was wrong.
Expectations…
• … can strongly influence perceptions.
• We probably knew that already. However,
we saw that empirical evidence supports
the hypothesis.
• Can more experience with the subject topic
strengthen the influence of expectation on
perception?
How many ‘f’s in this phrase?
• These functional fuses have been
developed after years of scientific
investigation of electric phenomena,
combined with the fruit of long experience
in the part of the two investigators who
have come forward with them for our
meetings today.
Experience  Expectations  Perception
• The second example: estimating the
number of ‘f’s in a phrase.
• Non-native speakers of English perform
better. (Do they?)
• The initial “Why?” is not completely
answered.
Potent Expectations
• Experiment by Wilson and Abrams (1977)
• Heart rate was affected by whether the
subject believed he was given alcohol
more than whether he was actually given
alcohol.
• Expectations turned out to be more
important than changes in blood
chemistry!
A more sophisticated experiment…
• … by McMillen, Smith and Wells-Parker
(1989)
• “High sensation seekers” who believed they
had consumed alcohol drove more
recklessly than those who believed they had
not.
• “Low sensation seekers” who believed they
had consumed alcohol drove more
cautiously than those who believed they had
not.
Dartmouth vs. Princeton (1951)
• Hastorf and Cantril (1954) concluded that
“It is inaccurate and misleading to say that
different people have different ‘attitudes’
concerning the same ‘thing.’ For the ‘thing’
simply is not the same for different
people…”1
1) Hastorf, A.H., Cantril, H., 1954, “They saw a game: A case study,” The Journal of Abnormal and Social Psychology,
49, 129-134.
Hostile Media Effect
• Vallone, Ross and Lepper (1985) studied
the 1980 U.S. presidential elections.
• Approximately 1/3 of the 160 subjects
(registered voters) felt that the media had
been biased. In ~90% of these cases,
respondents felt the bias was against the
candidate they supported.2
2) Vallone, R.P., Ross, L., Lepper, M.R., 1985, “The hostile media phenomenon: Biased perception and perceptions of
media bias in coverage of the Beirut massacre,” Journal of Personality and Social Psychology, 49, 577-585.
Some Conclusions
• Perceptions are selective by nature.
• Perception depends on cognitive and
motivational factors.
• Decision makers should question their
own motivations and expectations while
making judgments and decisions.
Cognitive Dissonance
Cognitive Dissonance
• Festinger and Carlsmith’s (1959)
experiment. (Tedious tasks.)
I would lie…
• … for twenty dollars or for free, but not for
one dollar!
• So, I make myself believe that the tasks
were indeed enjoyable if I am paid only $1.
• Cognitive dissonance says that people try
to reduce or avoid psychological
inconsistencies.
Self-Perception Theory
• Festinger regarded cognitive dissonance
as a negative motivation factor, one that
should be avoided.
• Bem disagreed and argued that people
build their beliefs from observing
themselves behave.
Self-Perception Theory
• Argues that people build their beliefs and
attitudes based on how they behave under
various situations.
• People tend to do that more when their
internal cues about the situation are weak.
(i.e. they do not have preconceived
attitudes about the situation.)
So what happened…
• … in Festinger and Carlsmith’s
experiment?
• $1 case subjects looked at their own
behaviors and concluded that they should
have enjoyed the tasks, … since they
would not lie for $1.
• $20 case subjects concluded that they
bent the truth a little for the money
involved.
The Difference
• Cognitive Dissonance Theory attributes
the findings to a motivation to reduce inner
conflict.
• Self-Perception Theory explains the
findings in terms of how people infer the
causes of their behaviors.
Two Main Types of Dissonance
• Pre-Decisional Dissonance
– Sherman and Gorkin’s (1980) experiment.
– Kantola, Syme, and Campbell’s (1984) study.
– Doob et al.’s (1969) experiment.
(Mouthwash.)
• Post-Decisional Dissonance
– Knox and Inkster’s (1968) survey. (Horse
bets.)
– Frenkel and Doob’s survey (1976) (Elections.)
Conclusions
• Marketing: Explicitly label introductory
offers.
• Politics – Social Activism: Solicit small
contributions to campaigns and social
causes.
• Aronson’s (1972) statements.
• Changes in attitude can follow changes in
behavior.
Memory and Hindsight Biases
Is Memory Reconstructive?
• Myers’ (1990) example.
• “Close your eyes and recall a scene in
which you experienced something
pleasurable.”
Is Memory Reconstructive?
• Loftus and Palmer’s (1974) experiments.
• “How fast were the cars going?”
• “Did you see any broken glass?”
• …when the cars smashed, bumped, etc?
Are Memories Stored
Separately?
• Bransford and Franks (1971) (Ants)
• There is an element of “memory
construction” when remembering.
Hindsight Bias
• “I-knew-it-all-along” effect
• Elections, medical decisions, buying
decisions, games, etc.
• Do you have your own examples?
How to Reduce Hindsight Bias
• Consider reasons why results might have
turned out differently.
• Slovic and Fischhoff’s (1977) study.
Plasticity
Plasticity
• “Plasticity … refers to a discrepancy in
how people answer two versions of the
same question.”1
1) Plous, Scott, 1993, The Psychology of Judgment and Decision Making, pp.58, McGraw-Hill, New York, NY.
Example
• Alternative A: Losing $50 with p=1.00.
• Alternative B: Losing $200 with p=0.25
and losing nothing with p=0.75.
• EV(Alternative A) = EV(Alternative B)
• About 80% choose Alternative B.
However
• When put in an insurance premium
context, about 65% choose Alternative A.
• Possible reasons:
– Insurance premium context emphasizes the
potential loss ($200), thus making it look big.
– Buying insurance is considered a prudent
behavior socially.
– …?
Order Effects
• The order of consecutive questions, or the
order of response alternatives to questions
may affect the responses by individuals.
• Question order effects
• Response alternative order effects
Question Order Effects
From Schumann and Presser (1981)
About half of the respondents were asked the two
questions in the order below:
• 1) Do you think a Communist country like Russia
should let American newspaper reporters come
in and send back to America the news as they
see it?
• 2) Do you think the United States should let
Communist newspaper reporters from other
countries come in and send back to their papers
the news as they see it?
Question Order Effects
The other half of the respondents were asked the
two questions in the reverse order as given
below:
• 1) Do you think the United States should let
Communist newspaper reporters from other
countries come in and send back to their papers
the news as they see it?
• 2) Do you think a Communist country like Russia
should let American newspaper reporters come
in and send back to America the news as they
see it?
Results
Yes
• Case 1:
– Q1
– Q2
82%
75%
• Case 2:
– Q1
– Q2
55%
64%
Response Alternative Order
Effects
• These effects are slighter than the
question order effects.
• A common response order effect is a type
of recency effect, where respondents tend
to choose the last response alternative.
Example
From Schumann and Presser (1981)
• Version 1: Should divorce in this country be
easier to obtain, more difficult to obtain, or stay
as it is now?
• Respond percentages: 23%, 36%, and 41%
• Version 2: Should divorce in this country be
easier to obtain, stay as it is now, or more
difficult to obtain?
• Respond percentages: 26%, 29%, and 46%
In both cases, the most popular alternative was the last
one.
What Can be Done?
• What can be done to overcome order
effects, (considering that we have to put
the questions and the responses in one
order or another)?
Pseudo-Opinions
• Some respondents tend to offer opinions
even on issues about which they know
very little.
• Such respondents tend to shape their
“pseudo-opinions” (since they do not have
“real opinions”) according to how the
question is asked.
Example
From Hartley (1946)
• How Close Do You Fell to These
Nationalities?
– Danireans
– Pireneans
– Wallonians
• More than 80% of the respondents rated
these “nationalities” even though they do
not exist!
Example
From Gill (Tide Magazine, 1947)
• What is your opinion of the Metallic Metals
Act?
– Good move for U.S.
– Should be left to individual states
– O.K. for foreign states, but should not be
required in U.S.
– Of no value at all.
• 70% of the respondents gave an opinion
although there is no Metallic Metals Act!
Pseudo-Op.s In Political Affairs
• Pseudo-opinions can become important
factors in political affairs.
• In general, about 30% of respondents offer
pseudo-opinions.
• 30% can change the result of almost any
major election and referendum.
• Pseudo-opinions are particularly common
in issues concerning foreign and military
policy.
Filtering Pseudo-Opinions
• Offering response alternatives such as “No
opinion” or “I don’t know” can help filter out
pseudo-opinions.
• However, there may be a trap here.
People may try to look like they know
about the issue for social reasons, even if
they do not.
• “Choose not to offer opinion at this time”
may be a better alternative. Saves face.
Inconsistency
• “Inconsistency refers to a discrepancy
between two related attitudes (attitudeattitude inconsistency) or between an
attitude and a corresponding behavior
(attitude-behavior inconsistency).”1
1) Plous, Scott, 1993, The Psychology of Judgment and Decision Making, pp.58, McGraw-Hill, New York, NY.
A-A Inconsistency Example
From Prothro and Grigg (1960)
• Democratic principles and specific
applications.
• Random sample of registered voters in
Ann Arbor, MI and Tallahassee, FL.
• 51% “Only well-informed people should be
permitted to vote.”
• 79% “Only taxpayers should vote.”
A-B Inconsistency Example
From Darley and Batson (1973)
• Many seminary students who were about
to give a speech on the parable of the
Good Samaritan failed to help a person in
need when they were rushed.
How Common is Inconsistency?
• Wicker (1969) reviewed 46 studies and
concluded that inconsistency is so
common that it is more likely that attitudes
will not be closely related to overt
behaviors than they will be.
• On the other hand, Ajzen and Fishbein
(1977) argued that attitudes concerning
particular actions and targets are generally
good predictors of related behaviors.
Wording and Framing Effects
Question Wording and Framing
• The way a question is worded or framed
may affect individuals’ responses to that
question.
Safe and Safer
• 40% of the respondents of a poll in Britain
said the nuclear weapons of their country
made them “feel safe.”
• When the question was asked slightly
differently, 50% of the respondent said the
nuclear weapons of their country made
them “feel safer.”
Another Example
From Converse and Schuman (1970)
• “Should the U.S. Army withdraw from
Vietnam faster or slower?”
– 42% “faster,” 16% “slower,” 29% “same as
now.”
• “Is the pace with which the U.S. Army
withdraws from Vietnam too fast, too slow,
or about right?”
– 29% “too slow,” 6% “too fast,” 49% “about
right.”
Disadvantage of Middle
Categories
• Middle categories may act as a “safe”
alternative since they are “midway” and
attract pseudo-opinions.
Open Ended vs. Listed
Responses
• Some responses may be chosen by
substantially more respondents when they
are listed as specific alternatives than in
an open question, (a question without
specific response alternatives.)
Examples
• Schuman and Scott’s (1987) study: “The
most important problem facing this country
today?”
• Schwarz, Hippler, Deutsch and Strack’s
(1985) study: “How much TV do you watch
daily?”
Hilarious Examples
From Harris (1973)
• “How long was the movie?”
– (Mean Answer = 130 min.)
• “How short was the movie?”
– (Mean Answer = 100 min.)
• “How tall was the basketball player?”
– (Mean Answer = 79’’)
• “How short was the basketball player?”
– (Mean Answer = 69’’)
“Marketing Application” Example
Social Desirability
• People tend to choose responses they
judge to be “socially desirable” over those
they judge not to be so.
Examples
From Clymer (1982)
• Nuclear weapons freeze
From Budiansky (1988)
• Support for Nicaraguan rebels
From Schuman and Presser (1981)
• Sending troops in case of a Vietnam-like
situation.
Allow or Forbid
From Rugg (1941)
• “Do you think that the U.S. should allow
public speeches against democracy?”
– 62% “No.”
• “Do you think that the U.S. should forbid
public speeches against democracy?”
– 46% “Yes.”
• At least 16% would “not allow” rather than
“forbid”!
Other Examples
Schuman and Presser (1981)
• Repetition of Rugg’s experiment.
Hippler and Schwarz (1986)
• Peep shows, X-rated films, salt on
highways.
Framing
•
•
•
•
Decision 1:
Alternative A: Gain $240, p=1.00
Alternative B: Gain $1000, p=0.25
84% chose A.
•
•
•
•
Decision 2:
Alternative C: Lose $750, p=1.00
Alternative D: Lose $1000, p=0.75
87% chose D.
When Combined
• A & D: Lose $760, p=0.75; Gain $240,
p=0.25
• B & C: Lose $750, p=0.75; Gain $250,
p=0.25
• B & C are better than A & D when
combined, but far more people preferred A
& D over B & C.
Other Examples
Tversky and Kahneman (1981)
• Alternative programs to fight a disease.
Schelling (1981)
• Child tax cuts vs. “no-child tax”.
Psychological Accounting
• People tend to frame outcomes as well as
choices. Tversky and Kahneman called
this “psychological accounting.”
• Example: Losing your ticket vs. losing
money. (Tversky and Kahneman, 1981.)
• Example: Calculator on sale vs. jacket on
sale. (Tversky and Kahneman, 1981.)
Conclusions
• People’s answer are a function of (among
other things):
– Question order
– Question context
– Question format (open vs. closed)
– Whether the pseudo-opinions were filtered
– Existence of catch phrases in questions
Conclusions
• …:
– Range of suggested response alternatives
– Order of the response alternatives
– Existence of middle categories as response
alternatives
– Framing of problems (gains vs. losses)
• It would be wise not to take the findings of
surveys at face value, but approach them
from a critical perspective instead.
Expected Utility Theory
Expected Value
• Example: Flip a coin and throw a die. If the
coin shows heads and the die show an
even number you get $2 times the number
on the die. Otherwise you get nothing.
Expected Value
1: 0.166
2: 0.166
Throw die
Heads: 0.5
0.5 * 0.166 = 0.083
4: 0.166
0.5 * 0.166 = 0.083
6: 0.166
1: 0.166
2: 0.166
Tails: 0.5
Throw die
0.5 * 0.166 = 0.083
3: 0.166
5: 0.166
Flip coin
0.5 * 0.166 = 0.083
0.5 * 0.166 = 0.083
0.5 * 0.166 = 0.083
0.5 * 0.166 = 0.083
0.5 * 0.166 = 0.083
3: 0.166
0.5 * 0.166 = 0.083
4: 0.166
0.5 * 0.166 = 0.083
5: 0.166
6: 0.166
0.5 * 0.166 = 0.083
0.5 * 0.166 = 0.083
Expected Value
• 0.083*$2*2 + 0.083*$2*4 + 0.083*$2*6
= $2
St. Petersburg Paradox
• ½ * $2 + ¼ * $4 + 1/8 * 8 + … + 1/K * ($2)K
= $1
+ $1 + $1 + … +
$1
= 
• How much would you pay to play this
game?
Utility
Utility
Wealth
Expected Utility
• Sum of the utilities of all possible
outcomes of a chance event.
 p i * ui
Principles of Expected Utility Th.
•
•
•
•
•
•
Ordering alternatives
Dominance
Cancellation
Transitivity
Continuity
Invariance
Paradoxes in Rationality
Allais Paradox
• Situation 1:
– Alternative A: p=1, $1,000,000
– Alternative B: p=.10, $2,500,000; p=.89,
$1,000,000; p=.01, $0
• Situation 2:
– Alternative A: p=.11, $1,000,000; p=.89, $0
– Alternative B: p=.10, $2,500,000; p=.9, $0
Allais Paradox
10
89
1
$ 1M
$ 1M
$ 1M
10
89
1
$ 2.5M
$ 1M
$0
10
89
1
$ 1M
$0
$ 1M
10
89
1
$ 2.5M
$0
$0
A
Situation 1
B
A
Situation 2
B
Ellsberg’s Paradox
30 BALLS
60 BALLS
Betting Alternatives
Red
Black
Yellow
1: A red ball
$100
$0
$0
$0
$100
$0
2: A black ball
30 BALLS
60 BALLS
Betting Alternatives
Red
Black
Yellow
1: A red or yellow ball
$100
$0
$100
$0
$100
$100
2: A black or yellow ball
Intransitivity
Dimensions
Applicants
IQ
Experience
A
120
1 year
B
110
2 years
C
100
3 years
Intransitivity
Gamble Probability
of a Win
A
7/24
Payoff
$5.00
Expected
Value
$1.46
B
8/24
$4.75
$1.58
C
9/24
$4.50
$1.69
D
10/24
$4.25
$1.77
E
11/24
$4.00
$1.83
Intransitivity
Committee Members
Candidates
Ann
Bob
Cindy
Don
Ellen
Joe Schmoe
1
1
2
3
3
Jane Doe
2
3
3
1
1
Al Einstein
3
2
1
2
2
Preference Reversals
Pair
High Probability
EV
1
.99 win $4.00
.01 Lose $1.00
$3.95 .33 win $16.00
.67 Lose $2.00
$3.94
2
.95 win $2.50
.05 Lose $0.75
…
$2.34 .40 win $8.50
.60 Lose $1.50
…
…
$2.50
…
High Payoff
EV
…
Are Violations of EUT Irrational?
• No information about the cost of errors
versus the cost of following the principles.
• A non-logical strategy may be rational if it
provides a good approximation to the
utility provided by normative methods, in
the long run.
Decision Making Models
Satisficing
• People “satisfice” rather than optimize for
several reasons:
– They do not have complete information
– They do not understand the available
information
– They cannot calculate precisely
–…
Prospect Theory
• Assumes that value functions for gains
and losses are different.
Prospect Theory
• Problem 1:
– Alternative A: p=.50, gain $1000
– Alternative B: p=1.00, gain $500 (84% chose
this.)
• Problem 2:
– Alternative A: p=.50, lose $1000 (70% chose
this.)
– Alternative B: p=1.00, lose $500
Decision Weights
Decision
Weight
Probability
Prospect Theory
• Problem 1:
– Alternative A: p=1/1000, win $5000 ( 75%
chose this.)
– Alternative B: p=1.00, win $5
• Problem 2:
– Alternative A: p=1/1000, lose $5000
– Alternative B: p=1.00, lose $5 (>80% chose
this.)
Certainty Effect
• People attribute more value (utility) to
eliminating risk versus reducing risk.
• Russian roulette example.
• Probabilistic insurance example.
Pseudocertainty Effect
• People value eliminating risk more than
reducing it even when the certainty is
apparent rather than real.
• Vaccine example.
• Dry cleaner example.
Regret Theory
• Based on two basic assumptions:
– People feel rejoice or regret according to the
outcomes of their decisions.
– People try to anticipate and take account of
these sensations when making decisions.
• Regret theory can explain many of the
paradoxes we discussed above.