Academic journal article Psychonomic Bulletin & Review

Sizing Up Information Distortion: Quantifying Its Effect on the Subjective Values of Choice Options

Academic journal article Psychonomic Bulletin & Review

Sizing Up Information Distortion: Quantifying Its Effect on the Subjective Values of Choice Options

Article excerpt

Published online: 2 December 2011

© Psychonomic Society, Inc. 2011

Abstract When choosing between options, people often distort new information in a direction that favors their developing preference. Such information distortion is widespread and robust, but less is known about the magnitude of its effects. In particular, research has not quantified the effects of distortion relative to the values of the choice options. In two experiments, we manipulated participants' initial preferences in choices between risky three-outcome monetary gambles (win, lose, or neither) by varying the order of five information items (e.g., amount to win, chance of losing). In Experiment 1 (N = 397), the effect of initial information on gambles' certainty equivalents (subjective values) was mediated by the distortion of later information. The indirect effect on the difference between gambles' certainty equivalents averaged 27% of the gambles' mean expected value. In Experiment 2 (N = 791), we increased the difference between gambles on a later information item to overcome the effect of initial information on participants' choices. The required change averaged 31% of the gambles' mean expected value. We conclude that the effects of information distortion can be substantial.

Keywords Certainty equivalent . Choice . Information distortion . Mediation . Monetary gambles . Multilevel modeling . Preference formation . Risk

When people choose between alternatives that vary on a number of attributes, an early preference for one alternative can lead to the distortion of later information in the direction of the tentative favorite (Brownstein, 2003; DeKay, Patiño-Echeverri, & Fischbeck, 2009b; Holyoak & Simon, 1999; Russo, Medvec, & Meloy, 1996; Russo, Meloy, & Medvec, 1998; Simon, Krawczyk, & Holyoak, 2004; Simon, Pham, Le, & Holyoak, 2001; Simon, Snow, & Read, 2004). This predecisional information distortion occurs in decisions that do not explicitly involve risk (e.g., Russo et al., 1996, 1998; Simon, Krawczyk, & Holyoak, 2004) and in those that do (DeKay et al., 2009b; DeKay, Stone, & Miller, 2011; Glöckner & Herbold, 2011; Russo & Yong, 2011). It results from a motivation or unconscious inclination to achieve consistency (Glöckner, Betsch, & Schindler, 2010; Holyoak & Simon, 1999; Russo, Carlson, Meloy, & Yong, 2008; Simon et al., 2001) and mediates the effects of initial preferences on final choices and confidence judgments (DeKay et al., 2011).

The distortion of input information to support a tentatively preferred option highlights the bidirectional or circular nature of decision processes. This well-replicated finding contradicts most descriptive and normative theories of choice (e.g., prospect theory, regret theory, expected utility theory, multiattribute utility theory), which assume that the evaluation of information affects the evaluation of alternatives, but not vice versa (DeKay et al., 2009a, 2009b, 2011; Glöckner et al., 2010; Holyoak & Simon, 1999; Russo & Yong, 2011; Simon, Snow, & Read, 2004). In contrast, one descriptive theory that does not assume unidirectionality is parallel constraint satisfaction (PCS), a coherence-maximizing connectionist model that incorporates bidirectional links between the choice options and the input information (Glöckner et al., 2010; Holyoak & Simon, 1999; Simon, Snow, & Read, 2004).

The circularity of coherence-driven decision processes is not only normatively troubling, but also potentially harmful. For example, Russo, Carlson, and Meloy (2006) demonstrated that information distortion can lead people to select alternatives that they had previously evaluated as inferior, and Levy and Hershey (2006) noted that the distortion of probabilities can lead patients to make poor medical choices. In the legal domain, Simon (2004) described several adverse consequences of jurors' distorted evaluations of evidence, including the increased likelihood of erroneous decisions in civil and criminal trials. …

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