Decision by sampling
Stewart, Neil, 1974-, Chater, Nick and Brown, G. D. A. (Gordon D. A.). (2006) Decision by sampling. Cognitive Psychology, Vol.53 (No.1). pp. 1-26. ISSN 0010-0285
WRAP_Stewart_Decision_Sampling.pdf - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Official URL: http://dx.doi.org/10.1016/j.cogpsych.2005.10.003 ...
We present a theory of decision by sampling (DbS) in which, in contrast with traditional models, there are no underlying psychoeconomic scales. Instead, we assume that an attribute’s subjective value is constructed from a series of binary, ordinal comparisons to a sample of attribute values drawn from memory and is its rank within the sample. We assume that the sample reflects both the immediate distribution of attribute values from the current decision’s context and also the background, real-world distribution of attribute values. DbS accounts for concave utility functions; losses looming larger than gains; hyperbolic temporal discounting; and the overestimation of small probabilities and the underestimation of large probabilities.
|Item Type:||Journal Article|
|Subjects:||B Philosophy. Psychology. Religion > BF Psychology|
|Divisions:||Faculty of Science > Psychology|
|Library of Congress Subject Headings (LCSH):||Decision making -- Mathematical models, Sampling (Statistics), Probabilities|
|Journal or Publication Title:||Cognitive Psychology|
|Official Date:||August 2006|
|Page Range:||pp. 1-26|
|Access rights to Published version:||Open Access|
|Funder:||Economic and Social Research Council (Great Britain) (ESRC)|
|Grant number:||L328253039 (ESRC), RES-000-22-0918 (ESRC)|
Abdellaoui, 2000 M. Abdellaoui, Parameter free elicitation of utilities and probability weighting functions, Management Science 46 (2000), pp. 1497–1512.
Alba et al., 1999 J.W. Alba, C.F. Mela, T.A. Shimp and J.E. Urbany, The effect of discount frequency and depth on consumer price judgments, Journal of Consumer Research 26 (1999), pp. 99–114.
Allais, 1953 M. Allais, Le comportement de l’homme rationel devant le risque, critique des postulats et axiomes de l’ecole americaine, Econometrica 21 (1953), pp. 503–546.
Anderson, 1990 J.R. Anderson, The adaptive character of thought, Erlbaum, Hillsdale, NJ (1990).
Anderson and Milson, 1989 J.R. Anderson and R. Milson, Human memory: An adaptive perspective, Psychological Review 96 (1989), pp. 703–719.
Anderson and Schooler, 1991 J.R. Anderson and L.J. Schooler, Reflections of the environment in memory, Psychological Science 2 (1991), pp. 396–408.
Bak, 1997 P. Bak, How nature works: The science of self-organized criticality, Oxford University Press, Oxford, UK (1997).
Benartzi and Thaler, 2001 S. Benartzi and R.H. Thaler, Naive diversification strategies in defined contribution saving plans, The American Economic Review 91 (2001), pp. 79–98.
Benzion et al., 1989 U. Benzion, A. Rapoport and J. Yagil, Discount rates inferred from decisions: An experimental study, Management Science 35 (1989), pp. 270–284.
Bentham, 1970 J. Bentham, An introduction to the principles of morals and legislation. In: J.H. Burns and H.L.A. Hart, Editors, The Athlone Press, London (1970) (Original work published, 1789).
Bettman et al., 1998 J.R. Bettman, M.F. Luce and J.W. Payne, Constructive consumer choice processes, Journal of Consumer Research 25 (1998), pp. 187–217.
Beyth-Marom, 1982 R. Beyth-Marom, How probable is probable. A numerical translation of verbal probability expressions, Journal of Forecasting 1 (1982), pp. 257–269.
Birnbaum, 1992 M.H. Birnbaum, Violations of the monotonicity and contextual effects in choice-based certainty equivalents, Psychological Science 3 (1992), pp. 310–314.
Bleichrodt and Pinto, 2000 H. Bleichrodt and J.L. Pinto, A parameter-free elicitation of the probability weighting function in medical decision analysis, Management Science 46 (2000), pp. 1485–1496.
Bordley and LiCalzi, 2000 R. Bordley and M. LiCalzi, Decision analysis using targets instead of utility functions, Decision in Economics and Finance 23 (2000), pp. 53–74.
Brown et al., 2004 Brown, G. D. A., Gardner, J., Oswald, A., & Qian, J. (2004). Rank dependence in employees’ wellbeing. Manuscript submitted for publication.
Brown and Qian, 2004 Brown, G. D. A., & Qian, J. (2004). The origin of the probability weighting function: A psychophysical approach. Manuscript submitted for publication.
Brun and Teigen, 1988 W. Brun and K.H. Teigen, Verbal probabilities: Ambiguous, context-dependent, or both?, Organizational Behavior and Human Decision Processes 41 (1988), pp. 390–404.
Budescu and Wallsten, 1985 D.V. Budescu and T.S. Wallsten, Consistency in interpretation of probabilistic phrases, Organizational Behavior and Human Decision Processes 36 (1985), pp. 391–405.
Budescu and Wallsten, 1995 D.V. Budescu and T.S. Wallsten, Processing linguistic probabilities: General principles and empirical evidence. In: J. Busemeyer, D.L. Medin and R. Hastie, Editors, Decision making from a cognitive perspective, Academic Press, San Diego, CA (1995), pp. 275–318.
Budescu et al., 1988 D.V. Budescu, S. Weinberg and T.S. Wallsten, Decisions based on numerically and verbally expressed uncertainties, Journal of Experimental Psychology: Human Perception and Performance 14 (1988), pp. 281–294.
Busemeyer and Townsend, 1993 J.R. Busemeyer and J.T. Townsend, Decision field theory: A dynamic-cognitive approach to decision making in an uncertain environment, Psychological Review 100 (1993), pp. 432–459.
Camerer and Ho, 1994 C.F. Camerer and T.H. Ho, Violations of the betweenness axiom and nonlinearity in probability judgment, Journal of Risk and Uncertainty 8 (1994), pp. 167–196.
Chapman, 1996 G.B. Chapman, Temporal discounting and utility for health and money, Journal of Experimental Psychology: Learning, Memory, and Cognition 22 (1996), pp. 771–791.
Chater and Brown, 1999 N. Chater and G.D.A. Brown, Scale-invariance as a unifying psychological principle, Cognition 69 (1999), pp. b17–b24.
Clarke et al., 1992 V.A. Clarke, C.L. Ruffin, D.J. Hill and A.L. Beamen, Ratings of orally presented verbal expressions of probability by a heterogeneous sample, Journal of Applied Social Psychology 22 (1992), pp. 638–656.
Diederich, 2003 A. Diederich, MDFT account of decision making under time pressure, Psychonomic Bulletin & Review 10 (2003), pp. 157–166.
Dougherty et al., 1999 M.R.P. Dougherty, C.F. Gettys and E.E. Ogden, MINERVA-DM: A memory process model for judgments of likelihood, Psychological Review 106 (1999), pp. 180–209.
Dougherty and Hunter, 2003a M.P.R. Dougherty and J. Hunter, Hypothesis generation, probability judgment, and individual differences in working memory capacity, Acta Psychologica 113 (2003), pp. 263–282.
Dougherty and Hunter, 2003b M.P.R. Dougherty and J. Hunter, Probability judgment and subadditivity: The role of working memory capacity and constraining retrieval, Memory & Cognition 31 (2003), pp. 968–982.
Erev and Cohen, 1990 I. Erev and B.L. Cohen, Verbal versus numerical probabilities: Efficiency, biases, and the preference paradox, Organizational Behavior and Human Decision Processes 45 (1990), pp. 1–18.
Friedman, 1989 D. Friedman, The S-shaped value function as a constrained optimum, American Economic Review 79 (1989), pp. 1243–1248.
Garner, 1962 W.R. Garner, Uncertainty and structure and psychological concepts, Wiley, New York (1962).
Gigerenzer and Hoffrage, 1995 G. Gigerenzer and U. Hoffrage, How to improve Bayesian reasoning without instruction: Frequency formats, Psychological Review 102 (1995), pp. 684–704.
Green et al., 1997 L. Green, J. Myerson and E. McFadden, Rate of temporal discounting decreases with amount of reward, Memory & Cognition 25 (1997), pp. 715–723.
González-Vallejo, 2002 C. González-Vallejo, Making trade-offs: A probabilistic and context-sensitive model of choice behavior, Psychological Review 109 (2002), pp. 137–154.
Gonzalez and Wu, 1999 R. Gonzalez and G. Wu, On the shape of the probability weighting function, Cognitive Psychology 38 (1999), pp. 129–166.
Gutenberg and Richter, 1949 B. Gutenberg and C.F. Richter, Seismicity of the earth, Princeton University Press, Princeton, NJ (1949).
Hertwig et al., 2004 R. Hertwig, G. Barron, E.U. Weber and I. Erev, Decisions from experiences and the effect of rare events in risky choice, Psychological Science 15 (2004), pp. 534–539.
Hinson et al., 2003 J.M. Hinson, T.L. Jameson and P. Whitney, Impulsive decision making and working memory, Journal of Experimental Psychology: Learning, Memory, and Cognition 29 (2003), pp. 298–306.
Hintzman, 1984 D.L. Hintzman, MINERVA2: A simulation model of human memory, Behavior Research Methods, Instruments, and Computers 16 (1984), pp. 96–101.
Hintzman, 1988 D.L. Hintzman, Judgments of frequency and recognition memory in a multiple-trace memory model, Psychological Review 95 (1988), pp. 528–551.
Ijiri and Simon, 1977 Y. Ijiri and H.A. Simon, Skew distributions and the size of business firms, North Holland, Amsterdam (1977).
Johnson and Bickel, 2005 Johnson, M. W., & Bickel, W. K. (2005). Delay discounting: A review, reanalysis, and critique of models and quantifications. Manuscript submitted for publication.
Johnstone and Nava, 1985 A.C. Johnstone and S. Nava, Recurrence rates and probability estimates for the New Madrid Seismic Zone, Journal of Geophysical Research 90 (1985), p. 6737.
Juslin and Persson, 2002 P. Juslin and M. Persson, PROBabilities from EXemplars (PROBEX): A “lazy” algorithm for probabilistic inference from generic knowledge, Cognitive Science 26 (2002), pp. 563–607.
Kahneman and Miller, 1986 D. Kahneman and D.T. Miller, Norm theory: Comparing reality to its alternatives, Psychological Review 93 (1986), pp. 136–153.
Kahneman and Tversky, 1979 D. Kahneman and A. Tversky, Prospect theory: An analysis of decision under risk, Econometrica 47 (1979), pp. 263–291.
Kahneman and Tversky, 2000 In: D. Kahneman and A. Tversky, Editors, Choices, values and frames, Cambridge University Press & the Russell Sage Foundation, New York (2000).
Karelitz and Budescu, 2004 T.M. Karelitz and D.V. Budescu, You say “probable” and I say “Likely”: Improving interpersonal communication with verbal probability phrases, Journal of Experimental Psychology: Applied 10 (2004), pp. 25–41.
Kirby, 1997 K.N. Kirby, Bidding on the future: Evidence against normative discounting of delayed rewards, Journal of Experimental Psychology: General 126 (1997), pp. 54–70.
Kirby and Santiesteban, 2003 K.N. Kirby and M. Santiesteban, Concave utility, transaction costs, and risk in measuring discounting of delayed rewards, Journal of Experimental Psychology: Learning, Memory, and Cognition 29 (2003), pp. 66–79.
Kornienko, 2004 Kornienko, T. (2004). A cognitive basis for cardinal utility. Working paper.
Laming, 1984 D.R.J. Laming, The relativity of “absolute” judgements, British Journal of Mathematical and Statistical Psychology 37 (1984), pp. 152–183.
Laming, 1997 D.R.J. Laming, The measurement of sensation, Oxford University Press, London (1997).
Landauer and Dumais, 1997 T.K. Landauer and S.T. Dumais, A solution to Plato’s problem: The latent semantic analysis theory of acquisition, induction, and representation of knowledge, Psychological Review 104 (1997), pp. 211–240.
Loewenstein, 1987 G. Loewenstein, Anticipation and the valuation of delayed consumption, Economic Journal 97 (1987), pp. 666–684.
Loewenstein and Thaler, 1989 G. Loewenstein and R.H. Thaler, Anomalies: Intertemporal choice, Journal of Economic Perspectives 3 (1989), pp. 181–193.
Loomes and Sugden, 1982 G. Loomes and R. Sugden, Regret theory: An alternative theory of rational choice under uncertainty, Economic Journal 92 (1982), pp. 805–824.
Lund and Burgess, 1996 K. Lund and C. Burgess, Producing high-dimensional semantic spaces from lexical co-occurrence, Behavioral Research Methods, Instruments, & Computers 28 (1996), pp. 203–208.
Mandelbrot, 1982 B. Mandelbrot, The fractal geometry of nature (2nd ed.), Freeman, San Franciso, CA (1982).
Mazur, 1987 J.E. Mazur, An adjusting procedure for studying delayed reinforcement. In: M.L. Commons, J.E. Mazur, J.A. Nevin and H. Rachlin, Editors, Quantitative analyses of behavior, Vol. 5: The effect of delay and of intervening events on reinforcement value Vol. 5, Erlbaum, Hillsdale, NJ (1987), pp. 55–73.
Miller, 1956 G.A. Miller, The magical number seven, plus or minus two: Some limits on our capacity for information processing, Psychological Review 63 (1956), pp. 81–97.
Myerson and Green, 1995 J. Myerson and L. Green, Discounting of delayed rewards: Models of individual choice, Journal of the Experimental Analysis of Behavior 64 (1995), pp. 263–276.
Niedrich et al., 2001 R.W. Niedrich, S. Sharma and D.H. Wedell, Reference price and price perceptions: A comparison of alternative models, Journal of Consumer Research 28 (2001), pp. 339–354.
Oaksford and Chater, 1994 M. Oaksford and N. Chater, A rational analysis of the selection task as optimal data selection, Psychological Review 101 (1994), pp. 608–631.
Oaksford and Chater, 1998 M. Oaksford and N. Chater, Rationality in an uncertain world: Essays on the cognitive science of human reasoning, Psychology Press/Erlbaum, Hove, England (1998).
Olson and Budescu, 1997 M.J. Olson and D.V. Budescu, Patterns of preference for numerical and verbal probabilities, Journal of Behavioral Decision Making 10 (1997), pp. 117–131.
Parducci, 1965 A. Parducci, Category judgment: A range–frequency model, Psychological Review 72 (1965), pp. 407–418.
Parducci, 1995 A. Parducci, Happiness, pleasure, and judgment: The context theory and its applications, Erlbaum, Mahwah, NJ (1995).
Payne et al., 1992 J.W. Payne, J.R. Bettman and E.J. Johnson, Behavioral decision research: A constructive processing perspective, Annual Review of Psychology 43 (1992), pp. 87–131.
Pollmann, 1998 T. Pollmann, On forgetting the historical past, Memory & Cognition 26 (1998), pp. 320–329.
Pollmann and Baayen, 2001 T. Pollmann and R.H. Baayen, Computing historical consciousness. A quantitative inquiry into the presence of the past in newspaper texts, Computers and the Humanities 35 (2001), pp. 237–253.
Prelec, 1998 D. Prelec, The probability weighting function, Econometrica 66 (1998), pp. 497–527.
Prelec and Loewenstein, 1998 D. Prelec and G. Loewenstein, The red and the black: Mental accounting of savings and debt, Marketing Science 17 (1998), pp. 4–28.
Quiggin, 1982 J. Quiggin, A theory of anticipated utility, Journal of Economic Behavior and Organisation 3 (1982), pp. 323–343.
Quiggin, 1993 J. Quiggin, Generalized expected utility theory: The rank-dependent model, Kluwer Academic Publishers, Norwell, MA (1993).
Rachlin, 1989 H. Rachlin, Judgment, decision, and choice, Freeman, New York (1989).
Rablen et al., 2004 Rablen, M. D., Brown, G. D. A., & Oswald, A. J. (2004). Social comparison, adaptation, and the utility of income. Unpublished manuscript.
Reagan et al., 1989 R.T. Reagan, F. Mosteller and C. Youtz, Quantitative meaning of verbal probability expressions, Journal of Applied Psychology 74 (1989), pp. 433–442.
Roe et al., 2001 R.M. Roe, J.R. Busemeyer and J.T. Townsend, Multialternative decision field theory: A dynamic connectionist model of decision making, Psychological Review 108 (2001), pp. 370–392.
Samuelson, 1937 P.A. Samuelson, A note of measurement of utility, The Review of Economic Studies 4 (1937), pp. 155–161.
Savage, 1954 L.J. Savage, The foundations of statistics, Wiley, New York (1954).
Schwarz and Vaughn, 2002 N. Schwarz and L.A. Vaughn, The availability heuristic revisited: Ease of recall and content of recall as distinct sources of information. In: T. Gilovich, D. Griffin and D. Kahneman, Editors, Heuristics and biases: The psychology of intuitive judgment, Cambridge University Press, Cambridge, England (2002), pp. 534–547.
Sedlmeier and Betsch, 2002 In: P. Sedlmeier and T. Betsch, Editors, Frequency processing and cognition, Oxford University Press, Oxford, England (2002).
Shefrin and Thaler, 1988 H. Shefrin and R.H. Thaler, The behavioral life-cycle hypothesis, Economic Inquiry 26 (1988), pp. 609–643.
Shepard, 1987 R.N. Shepard, Evolution of a mesh between principles of the mind and regularities of the world. In: J. Dupré, Editor, The latest on the best: Essays on evolution and optimality, MIT Press, Cambridge, MA (1987).
Shiffrin and Nosofsky, 1994 R.M. Shiffrin and R.M. Nosofsky, Seven plus or minus two: A commentary on capacity limitations, Psychological Review 101 (1994), pp. 357–361.
Simpson and Vuchinich, 2000 C.A. Simpson and R.E. Vuchinich, Reliability of a measure of temporal discounting, The Psychological Record 50 (2000), pp. 3–16.
Slovic, 1995 P. Slovic, The construction of preference, American Psychologist 50 (1995), pp. 364–371.
Stewart et al., 2005 N. Stewart, G.D.A. Brown and N. Chater, Absolute identification by relative judgment, Psychological Review 112 (2005), pp. 881–911.
Stewart et al., 2003 N. Stewart, N. Chater, H.P. Stott and S. Reimers, Prospect relativity: How choice options influence decision under risk, Journal of Experimental Psychology: General 132 (2003), pp. 23–46.
Thaler, 1981 R.H. Thaler, Some empirical evidence on dynamic inconsistency, Economic Letters 8 (1981), pp. 201–207.
Tversky and Kahneman, 1973 A. Tversky and D. Kahneman, Availability: A heuristic for judging frequency and probability, Cognitive Psychology 5 (1973), pp. 207–232.
Tversky and Kahneman, 1992 A. Tversky and D. Kahneman, Advances in prospect theory: Cumulative representation of uncertainty, Journal of Risk and Uncertainty 5 (1992), pp. 297–323.
Tversky and Koehler, 1994 A. Tversky and D.J. Koehler, Support theory: A nonextensional representation of subjective probability, Psychological
Actions (login required)