Positive Illusions of Preference Consistency

Total Page:16

File Type:pdf, Size:1020Kb

Positive Illusions of Preference Consistency COLUMBIA BUSINESS SCHOOL 1 Organizational Behavior and Human Decision Processes 98 (2005) 66–87 Positive Illusions of Preference Consistency: www.elsevier.com/locate/obhdp When Remaining Eluded by One's Preferences Yields Greater Subjective Well-Being and Decision Outcomes Positive illusions of preference consistency: When remaining eluded by oneÕs preferences yields greater subjective well-being and decision outcomes RachaelRachael E. Wells, E. Wells, Sheena Sheena S. IyengarIyengar * Columbia University Business School, New York, NY 10027-6902, USA Received 23 March 2004 Available online 11 July 2005 Abstract Psychological research has repeatedly demonstrated two seemingly irreconcilable human tendencies. People are motivated towards internal consistency, or acting in accordance with stable, self-generated preferences. Simultaneously though, people dem- onstrate considerable variation in the content of their preferences, often induced by subtle external influences. The current studies test the hypothesis that decision makers resolve this tension by sustaining illusions of preference consistency, which, in turn, confer psychological benefits. Two year-long longitudinal studies were conducted with graduating students seeking full-time employment. Results show that job seekers perceived themselves to have manifested greater preference consistency than actually exhibited in expressed preferences. Additionally, those harboring illusions of preference consistency experienced less negative affect throughout the decision process, greater outcome satisfaction, and subsequently, received more job offers. Ó 2005 Elsevier Inc. All rights reserved. Keywords: Preference consistency; Cognitive dissonance; Subjective well-being; Self-awareness; Job search We expect our heroes to exhibit decisiveness, stead- hesitate or even avoid making decisions altogether fastness, and resolve. In our society, idealized figures increases accordingly (Iyengar & Jiang, 2004; Iyengar are those principled individuals who unwaveringly up- & Lepper, 2000; Payne, Bettman, & Johnson, 1993). hold their beliefs and resist external and social pressures How do Americans reconcile their desire for steadfast to change (e.g., Maslow, 1954, 1968), while those who conviction, all the while navigating a constantly evolv- are perceived to vacillate are often punished with such ing environment in which their preferences may be ever negative trait ascriptions as immaturity, passivity, and changing? even stagnation. In order to preserve a positive self-im- We address this conflict between our ideals and the age, then, individuals within our culture are motivated reality of preference consistency by harkening back to to perceive themselves and to be perceived by others William James (1890/1950), who proposed that at the as exhibiting choices consistent with their stable prefer- very heart of oneÕs conception of self is a sense of con- ences (Aronson, 1968; Tesser, 2000). Yet, as even mun- stancy over time, rather than flux. The classic theories dane decision opportunities in contemporary American of cognitive consistency and dissonance (Abelson, life become increasingly complex, the likelihood that 1983; Abelson et al., 1968; Festinger, 1957; for a recent preferences will fluctuate and that decision makers will set of reviews see Harmon-Jones & Mills, 1999; Heider, 1958) rely on the assumption that humans are motivated by the pursuit of internal consistency. Studies have * Corresponding author. Fax: +1 212 316 9355. repeatedly demonstrated that when people engage in E-mail address: [email protected] (S.S. Iyengar). behaviors counter to previously stated attitudes, they 0749-5978/$ - see front matter Ó 2005 Elsevier Inc. All rights reserved. doi:10.1016/j.obhdp.2005.05.001 Published in: Organizational Behavior and Human Decision Process COLUMBIA BUSINESS SCHOOL 2 R.E. Wells, S.S. Iyengar / Organizational Behavior and Human Decision Processes 98 (2005) 66–87 67 tend to alter their attitudes so as to maintain congruence 2004). Rather, people are likely to recite standard per- with their current behavior rather than admit to con- sonal and cultural theories for their behaviors, highlight tradicting their initial views. Furthermore, research on information that confirms existing beliefs, draw upon the escalation of commitment indicates that once choos- accessible thoughts, and prioritize that which is condu- ers publicly commit to a position, they are less likely to cive to self-enhancement (e.g., Nisbett & Wilson, 1977; change that position even if their decision outcomes Sedikides, 1993; Wilson, Hodges, & Lafleur, 1995). Con- prove suboptimal or inconsistent with their previously sequently, the act of introspection serves not as a tool to stated goals and desires (for reviews see Brockner, increase self-awareness, but instead induces individuals 1992; Brockner & Rubin, 1985; Staw & Ross, 1987). to exhibit systematic biases toward upholding unrealisti- Meanwhile, despite the motivation for maintaining cally positive self-perceptions (for reviews of positive stable preferences, empirical studies have shown the mal- illusions see Taylor, 1989; Taylor & Brown, 1988, leability of individualsÕ preferences, even in consequen- 1994). These self-serving illusions are particularly preva- tial decision contexts (e.g., McNeil, Pauker, Sox, & lent when they concern highly valued dimensions of Tversky, 1982; Redelmeier & Shafir, 1995). Examina- self-evaluation (Burger & Cooper, 1979; Sedikides, tions of individualsÕ choices suggest that not only do Gaertner, & Toguchi, 2003), such as desired attributes their revealed preferences fluctuate, but they are also sus- (e.g., Alicke, 1985; Brown, 1986; Dunning, Meyerowitz, ceptible to numerous external influences, such as the way & Holzberg, 1989), favored behaviors (e.g., S. T. Allison, in which choices are framed (Kahneman & Tversky, Messick, & Goethals, 1989; Van Lange, 1991), close rela- 1979, 1984; Tversky & Kahneman, 1981, 1986), the tim- tionships (e.g., Buunk & vanderEijnden, 1997; Rusbult, ing of the preference elicitation relative to the course of Van Lange, Wildschut, Yovetich, & Verette, 2000), agen- the decision process (Barber, Daly, Giannantonio, & cy in events (for a review see Campbell & Sedikides, 1999; Phillips, 1994; Trope & Liberman, 2000, 2003), the Greenwald, 1980; Langer, 1975), and predictions about simultaneity of options under evaluation (Hsee, 1996, oneÕs future (e.g., Fontaine & Smith, 1995; Taylor et al., 1999), and the decision makerÕs emotional state at the 1992; Weinstein, 1980). time of choice (Isen, 1993; Nygren, Isen, Taylor, & Du- Given the documented proclivity toward positive illu- lin, 1996; Slovic, Finucane, Peters, & MacGregor, sions and the desirability for preference consistency, we 2002). The influence of these external factors is so power- propose that decision makers will distort their percep- ful that it may even lead choosers to reverse their initially tions of their own preference stability, thereby engaging stated preferences (Hsee, 1996, 1999; Lichtenstein & Slo- in illusions of preference consistency. Such illusions vic, 1973; for a review see Shafir & LeBoeuf, 2002; Slovic, would serve as a defense mechanism, shielding people 1995; Tversky & Kahneman, 1981). IndividualsÕ choices, from an awareness of preference variability which might then, are less a function of preconceived preferences than otherwise taint their self-images. Accordingly, we would of an evolving state in which preferences are constructed operationalize this illusion as belonging to those individ- during the choice-making process (Payne et al., 1993; uals who maintain the self-perception that their prefer- Payne, Bettman, & Schkade, 1999; Slovic, 1995). ences remain stable, irrespective of actual fluctuations How, though, do decision makers reconcile their desire in the expression and content of their preferences. for internal consistency with the practice of preference We predict that, like positive illusions more generally malleability? One possibility is that decision makers are (e.g., Erez, Johnson, & Judge, 1995; Fournier, de Rid- aware of shifts in their preferences and consciously alter der, & Bensing, 2002; Helgeson, 2003; Kleinke & Miller, them in order to maintain congruency between preferenc- 1998; Murray, Holmes, & Griffin, 1996a; Segerstrom, es and behaviors. Alternatively, decision makers may har- Taylor, Kemeny, & Fahey, 1998; Taylor et al., 1992; bor an illusion of preference consistency in which their Taylor, Lerner, Sherman, Sage, & McDowell, 2003; beliefs in the stability of their preferences are sustained de- Taylor, Wayment, & Collins, 1993), an illusion of pref- spite actual malleability in their revealed preferences. erence consistency will be linked to the psychological A priori, we might expect psychologically healthy benefit of increasing decision makersÕ subjective well-be- decision makers to be adept at detecting contradictions ing. The positive self-image to which self-serving illu- in their thoughts and actions. Certainly, embedded in sions contribute, in turn, bestows affective benefits the practices of psychoanalysts (e.g., Eagle, 2003; Freud, (Taylor & Brown, 1988). Research has also demonstrat- 1957a, 1957b), humanists (e.g., Rogers, 1951, 1961), and ed an association between illusions and the use of effec- cognitive–behavioral therapists (e.g., Beck, 1995) is the tive coping strategies in the face of threat (Brown, goal of training clinical populations to deepen self-in- 1993; Fournier et al., 2002; Segerstrom
Recommended publications
  • Power and Illusory Control
    Research Paper No. 2009 Illusory Control: A Generative Force Behind Power’s Far-Reaching Effects Nathanael J. Fast Deborah H. Gruenfeld Niro Sivanathan Adam D. Galinsky December 2008 R ESEARCH P APER S ERIES Electronic copy available at: http://ssrn.com/abstract=1314952 Running Head: POWER AND ILLUSORY CONTROL Illusory Control: A Generative Force Behind Power’s Far-Reaching Effects Nathanael J. Fast and Deborah H Gruenfeld Stanford University Niro Sivanathan London Business School Adam D. Galinsky Northwestern University *In press at Psychological Science Please address correspondence concerning this article to Nathanael J. Fast, Department of Organizational Behavior, Stanford University, 518 Memorial Way, Stanford, CA 94305; email: [email protected]. Electronic copy available at: http://ssrn.com/abstract=1314952 Power and Illusory Control 2 Abstract Three experiments demonstrated that the experience of power leads to an illusion of personal control. Regardless of whether power was experientially primed (Experiments 1 and 3) or manipulated through manager-subordinate roles (Experiment 2), it led to perceived control over outcomes that were beyond the reach of the powerholder. Furthermore, this illusory control mediated the influence of power on several self-enhancement and approach-related effects found in the power literature, including optimism (Experiment 2), self-esteem (Experiment 3), and action-orientation (Experiment 3), demonstrating its theoretical importance as a generative cause and driving force behind many of power’s far-reaching effects. A fourth experiment ruled out an alternative explanation: that positive mood, rather than illusory control, is at the root of power’s effects. The discussion considers implications for existing and future research on the psychology of power, perceived control, and positive illusions.
    [Show full text]
  • Impact of Illusion of Control on Perceived Efficiency in Pakistani Financial Markets
    Impact of Illusion…. Abasyn Journal of Social Sciences Vol. 5 No. 2 Impact of Illusion of Control on Perceived Efficiency in Pakistani Financial Markets Sidra Ajmal1 Maria Mufti2 Dr. Zulfiqar Ali Shah3 Abstract The purpose of this study is to test impact of illusion of control on perceived market efficiency. On the basis of literature review, questionnaire was developed. The study is carried out on sample of convenience of investors, financial analyst and finance scholars of Islamabad/ Rawalpindi. Questionnaire comprises of 15 items related to three forms of market efficiency and particular bias (illusion of control). The findings of the regression show significant results. This means that illusion of control has impact on perceived efficiency of Pakistani financial market. This study focuses on only individual located in Islamabad/Rawalpindi, and the sample size is also small due to time constraints. Further research can be done on a bigger scale to get the more general conclusions. This study will help investors to identify their biases and then formulate different strategies to reduce their irrational behavior. Key words: Illusion of control, market efficiency 1Sidra Ajmal, MS (Scholar), SZABIST, Islamabad. 2Maria Mufti, MS (Scholar), SZABIST, Islamabad. 3Dr. Zulfiqar Ali Shah, Associate Professor, SZABIST, Islamabad. Illusion of control is a psychological term referring to the tendency of people to overestimate their abilities to control any event, where as market efficiency is the phenomena primarily explained by Fama (1970). He had created a hypothesis that Sidra Ajmal, Maria Mufti, & Dr. Zulfiqar Ali Shah 100 Impact of Illusion…. Abasyn Journal of Social Sciences Vol. 5 No.
    [Show full text]
  • Social Psychology Glossary
    Social Psychology Glossary This glossary defines many of the key terms used in class lectures and assigned readings. A Altruism—A motive to increase another's welfare without conscious regard for one's own self-interest. Availability Heuristic—A cognitive rule, or mental shortcut, in which we judge how likely something is by how easy it is to think of cases. Attractiveness—Having qualities that appeal to an audience. An appealing communicator (often someone similar to the audience) is most persuasive on matters of subjective preference. Attribution Theory—A theory about how people explain the causes of behavior—for example, by attributing it either to "internal" dispositions (e.g., enduring traits, motives, values, and attitudes) or to "external" situations. Automatic Processing—"Implicit" thinking that tends to be effortless, habitual, and done without awareness. B Behavioral Confirmation—A type of self-fulfilling prophecy in which people's social expectations lead them to behave in ways that cause others to confirm their expectations. Belief Perseverance—Persistence of a belief even when the original basis for it has been discredited. Bystander Effect—The tendency for people to be less likely to help someone in need when other people are present than when they are the only person there. Also known as bystander inhibition. C Catharsis—Emotional release. The catharsis theory of aggression is that people's aggressive drive is reduced when they "release" aggressive energy, either by acting aggressively or by fantasizing about aggression. Central Route to Persuasion—Occurs when people are convinced on the basis of facts, statistics, logic, and other types of evidence that support a particular position.
    [Show full text]
  • Infographic I.10
    The Digital Health Revolution: Leaving No One Behind The global AI in healthcare market is growing fast, with an expected increase from $4.9 billion in 2020 to $45.2 billion by 2026. There are new solutions introduced every day that address all areas: from clinical care and diagnosis, to remote patient monitoring to EHR support, and beyond. But, AI is still relatively new to the industry, and it can be difficult to determine which solutions can actually make a difference in care delivery and business operations. 59 Jan 2021 % of Americans believe returning Jan-June 2019 to pre-coronavirus life poses a risk to health and well being. 11 41 % % ...expect it will take at least 6 The pandemic has greatly increased the 65 months before things get number of US adults reporting depression % back to normal (updated April and/or anxiety.5 2021).4 Up to of consumers now interested in telehealth going forward. $250B 76 57% of providers view telehealth more of current US healthcare spend % favorably than they did before COVID-19.7 could potentially be virtualized.6 The dramatic increase in of Medicare primary care visits the conducted through 90% $3.5T telehealth has shown longevity, with rates in annual U.S. health expenditures are for people with chronic and mental health conditions. since April 2020 0.1 43.5 leveling off % % Most of these can be prevented by simple around 30%.8 lifestyle changes and regular health screenings9 Feb. 2020 Apr. 2020 OCCAM’S RAZOR • CONJUNCTION FALLACY • DELMORE EFFECT • LAW OF TRIVIALITY • COGNITIVE FLUENCY • BELIEF BIAS • INFORMATION BIAS Digital health ecosystems are transforming• AMBIGUITY BIAS • STATUS medicineQUO BIAS • SOCIAL COMPARISONfrom BIASa rea• DECOYctive EFFECT • REACTANCEdiscipline, • REVERSE PSYCHOLOGY • SYSTEM JUSTIFICATION • BACKFIRE EFFECT • ENDOWMENT EFFECT • PROCESSING DIFFICULTY EFFECT • PSEUDOCERTAINTY EFFECT • DISPOSITION becoming precise, preventive,EFFECT • ZERO-RISK personalized, BIAS • UNIT BIAS • IKEA EFFECT and • LOSS AVERSION participatory.
    [Show full text]
  • Effects of Mindset on Positive Illusions
    EffectEffectss ooff MindseMindsett oonn PositivPositivee IllusionIllusionss ShelleSheJleyy EE.. TayloTaylorr PetePeterr MM.. GollwitzeGoUwitzerr UniversitUniversityy oofCalifomia,f California, LoLoss AngeleAngeless UniversitUniversityy ooff KonstanKonstanzz SS.. EE.. TayloTayklrandr and JJ.. DD.. Brown'Brown'ss (1988(1988)) positioposilionn thalhalt mentallmentallyy healthhealthyy peoplpoopIee exhibiexhibitt positivpositivee illusioni11lol5ionss raiseraisess aI dilemmadikmma:: HowHow dodo pewitpeople funC1Wnfunction effectivelyeffectively ifthc:irif their perceptionsperceptions arcare positivelypositively biased?biased? UsingUsing Gollwitzer'Go/lwiucr'ss deliberative-implementadeliberative-implementall mindseffiindsett distinctiondistinction,, wv.ee assesseassessedd whethewhetherr peoplpeoplee iinn a deliber­deliber- ativativee mindsemioosett shoshoww leslesss evidenceevidence ofof positivpositivee illusionillusionss thathann peoplpc~e inin anan implementalimplemental mindsetmind$Cl... ParticPartk·- ipantipanlSs completecompletedd aa mindsemindsett tastaskk anandd assessmentassessmentss ooff moodmood,, self-perceptionsself-perceptions,, anandd perceiveperceivedd (invul(in)vul­- nerabilitnerabilityy t10o riskrisk.. DeliberatioDeliberationn leledd tloworsenedo worsened moodmood,, greatevealerr perceiveperceivedd riskrisk,, anandd poorepoorerr self-percepself.percep­- tionstiool,, relativrelativee ttoo implementationimplementation;; controcontroll (n(noo mindsetmindset)) participantparticipantss typicalltypicallyy scorescoredd iinn betweenbet~n.
    [Show full text]
  • Illusion and Well-Being: a Social Psychological Perspective on Mental Health
    Psyehologlcal Bulletin Copyright 1988 by the American Psychological Association, Inc. 1988, Vol. 103, No. 2, 193-210 0033-2909/88/$00.75 Illusion and Well-Being: A Social Psychological Perspective on Mental Health Shelley E. Taylor Jonathon D. Brown University of California, Los Angeles Southern Methodist University Many prominenttheorists have argued that accurate perceptions of the self, the world, and the future are essential for mental health. Yet considerable research evidence suggests that overly positive self- evaluations, exaggerated perceptions of control or mastery, and unrealistic optimism are characteris- tic of normal human thought. Moreover, these illusions appear to promote other criteria of mental health, including the ability to care about others, the ability to be happy or contented, and the ability to engage in productive and creative work. These strategies may succeed, in large part, because both the social world and cognitive-processingmechanisms impose filters on incoming information that distort it in a positive direction; negativeinformation may be isolated and represented in as unthreat- ening a manner as possible. These positive illusions may be especially useful when an individual receives negative feedback or is otherwise threatened and may be especially adaptive under these circumstances. Decades of psychological wisdom have established contact dox: How can positive misperceptions of one's self and the envi- with reality as a hallmark of mental health. In this view, the ronment be adaptive when accurate information processing wcU-adjusted person is thought to engage in accurate reality seems to be essential for learning and successful functioning in testing,whereas the individual whose vision is clouded by illu- the world? Our primary goal is to weave a theoretical context sion is regarded as vulnerable to, ifnot already a victim of, men- for thinking about mental health.
    [Show full text]
  • John Collins, President, Forensic Foundations Group
    On Bias in Forensic Science National Commission on Forensic Science – May 12, 2014 56-year-old Vatsala Thakkar was a doctor in India but took a job as a convenience store cashier to help pay family expenses. She was stabbed to death outside her store trying to thwart a theft in November 2008. Bloody Footwear Impression Bloody Tire Impression What was the threat? 1. We failed to ask ourselves if this was a footwear impression. 2. The appearance of the impression combined with the investigator’s interpretation created prejudice. The accuracy of our analysis became threatened by our prejudice. Types of Cognitive Bias Available at: http://en.wikipedia.org/wiki/List_of_cognitive_biases | Accessed on April 14, 2014 Anchoring or focalism Hindsight bias Pseudocertainty effect Illusory superiority Levels-of-processing effect Attentional bias Hostile media effect Reactance Ingroup bias List-length effect Availability heuristic Hot-hand fallacy Reactive devaluation Just-world phenomenon Misinformation effect Availability cascade Hyperbolic discounting Recency illusion Moral luck Modality effect Backfire effect Identifiable victim effect Restraint bias Naive cynicism Mood-congruent memory bias Bandwagon effect Illusion of control Rhyme as reason effect Naïve realism Next-in-line effect Base rate fallacy or base rate neglect Illusion of validity Risk compensation / Peltzman effect Outgroup homogeneity bias Part-list cueing effect Belief bias Illusory correlation Selective perception Projection bias Peak-end rule Bias blind spot Impact bias Semmelweis
    [Show full text]
  • Illusory Control: a Generative Force Behind Power's Far-Reaching Effects
    PSYCHOLOGICAL SCIENCE Research Article Illusory Control A Generative Force Behind Power’s Far-Reaching Effects Nathanael J. Fast,1 Deborah H Gruenfeld,1 Niro Sivanathan,2 and Adam D. Galinsky3 1Stanford University, 2London Business School, and 3Northwestern University ABSTRACT—Three experiments demonstrated that the ex- A diverse set of findings has suggested that feelings of control perience of power leads to an illusion of personal control. often stem from the possession of power, although this rela- Regardless of whether power was experientially primed tionship has not been assessed directly. People with high so- (Experiments 1 and 3) or manipulated through roles cioeconomic status (Lachman & Weaver, 1998), members of (manager vs. subordinate; Experiment 2), it led to per- dominant groups (Guinote, Brown, & Fiske, 2006), and mem- ceived control over outcomes that were beyond the reach of bers of cultures that endorse the values of power and individual the power holder. Furthermore, this illusory control me- agency (Heine, Lehman, Markus, & Kitayama, 1999; Markus & diated the influence of power on several self-enhancement Kitayama, 1991) are all more likely than others to believe they and approach-related outcomes reported in the power can control the future. These same people—the wealthy, the literature, including optimism (Experiment 2), self-esteem educated, the numerical majority, the individualistic—also tend (Experiment 3), and action orientation (Experiment 3). to display more optimism, self-esteem, and action in pursuit of These results demonstrate the theoretical importance of their goals (e.g., Heine et al., 1999; Mirowsky & Ross, 2000; perceived control as a generative cause of and driving Twenge & Campbell, 2002).
    [Show full text]
  • The Self-Attribution Bias and Paranormal Beliefs ⇑ Michiel Van Elk
    Consciousness and Cognition 49 (2017) 313–321 Contents lists available at ScienceDirect Consciousness and Cognition journal homepage: www.elsevier.com/locate/concog The self-attribution bias and paranormal beliefs ⇑ Michiel van Elk Department of Psychology, University of Amsterdam, The Netherlands Amsterdam Brain and Cognition Center, University of Amsterdam, The Netherlands article info abstract Article history: The present study investigated the relation between paranormal beliefs, illusory control Received 8 December 2016 and the self-attribution bias, i.e., the motivated tendency to attribute positive outcomes Revised 2 February 2017 to oneself while negative outcomes are externalized. Visitors of a psychic fair played a card Accepted 2 February 2017 guessing game and indicated their perceived control over randomly selected cards as a function of the congruency and valence of the card. A stronger self-attribution bias was observed for paranormal believers compared to skeptics and this bias was specifically Keywords: related to traditional religious beliefs and belief in superstition. No relation between para- Paranormal beliefs normal beliefs and illusory control was found. Self-report measures indicated that paranor- Self-attribution bias Cognitive biases mal beliefs were associated to being raised in a spiritual family and to anomalous Individual differences experiences during childhood. Thereby this study suggests that paranormal beliefs are Superstition related to specific cognitive biases that in turn are shaped by socio-cultural factors. Illusion of control Ó 2017 Elsevier Inc. All rights reserved. 1. Introduction Paranormal beliefs refer to an eclectic range of New Age beliefs and practices, involving belief in Psi, precognition, witch- craft, superstition, as well as telekinesis and channeling (Lindeman & Svedholm, 2012).
    [Show full text]
  • Optimal Illusion of Control and Related Perception Biases
    OPTIMAL ILLUSION OF CONTROL AND RELATED PERCEPTION BIASES Olivier Gossner Jakub Steiner CERGE Charles University Center for Economic Research and Graduate Education Academy of Sciences of the Czech Republic Economics Institute EI WORKING PAPER SERIES (ISSN 1211-3298) Electronic Version 571 Working Paper Series 571 (ISSN 1211-3298) Optimal Illusion of Control and Related Perception Biases Olivier Gossner Jakub Steiner CERGE-EI Prague, September 2016 ISBN 978-80-7343-378-9 (Univerzita Karlova v Praze, Centrum pro ekonomický výzkum a doktorské studium) ISBN 978-80-7344-394-8 (Národohospodářský ústav AV ČR, v. v. i.) Optimal Illusion of Control and Related Perception Biases∗ Olivier Gossnery CREST, CNRS { Ecole´ Polytechnique, Universit´eParis Saclay and London School of Economics Jakub Steinerz University of Edinburgh and Cerge-Ei September 2016 Abstract We study perception biases arising under second-best perception strategies. An agent correctly observes a parameter that is payoff-relevant in many decision problems that she encounters in her environment but is unable to retain all the information un- til her decision. A designer of the decision process chooses a perception strategy that determines the distribution of the perception errors. If some information loss is un- avoidable due to cognition constraints, then (under additional conditions) the optimal perception strategy exhibits the illusion of control, overconfidence, and optimism. ∗We thank Andrew Clausen, Bard Harstad, Yuval Heller, Ed Hopkins, Drazen Prelec, J´ozsefS´akovics, Colin Stewart, Andy Zapechelnyuk, and the audiences at YEM 2016, BRIC 2016, GAMES 2016 and the Limited Cognition workshop in Barcelona for comments. Ludmila Matyskov´ahas provided excellent research assistance and Judith Levi has carefully edited the text.
    [Show full text]
  • I Am Fine but You Are Not: Optimistic Bias and Illusion of Control on Information Security Hyeun-Suk Rhee University of Texas at Dallas
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by AIS Electronic Library (AISeL) Association for Information Systems AIS Electronic Library (AISeL) International Conference on Information Systems ICIS 2005 Proceedings (ICIS) December 2005 I Am Fine but You Are Not: Optimistic Bias and Illusion of Control on Information Security Hyeun-Suk Rhee University of Texas at Dallas Young Ryu University of Texas at Dallas Cheong-Tag Kim Seoul National University Follow this and additional works at: http://aisel.aisnet.org/icis2005 Recommended Citation Rhee, Hyeun-Suk; Ryu, Young; and Kim, Cheong-Tag, "I Am Fine but You Are Not: Optimistic Bias and Illusion of Control on Information Security" (2005). ICIS 2005 Proceedings. 32. http://aisel.aisnet.org/icis2005/32 This material is brought to you by the International Conference on Information Systems (ICIS) at AIS Electronic Library (AISeL). It has been accepted for inclusion in ICIS 2005 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contact [email protected]. I AM FINE BUT YOU ARE NOT: OPTIMISTIC BIAS AND ILLUSION OF CONTROL ON INFORMATION SECURITY Hyeun-Suk Rhee Young U. Ryu School of Management School of Management University of Texas at Dallas University of Texas at Dallas Dallas, TX U.S.A. Dallas, TX U.S.A. [email protected] [email protected] Cheong-Tag Kim Department of Psychology Seoul National University Seoul, Korea [email protected] Abstract Information security is a critically important issue in current networked business and work environments. While there is extensive publicity on the increasing incidents of numerous information security breaches and their serious consequences, recent surveys and research on information security repeatedly identify the low levels of user and managerial awareness as a key obstacle to achieving a good information security posture.
    [Show full text]
  • 50 Cognitive and Affective Biases in Medicine (Alphabetically)
    50 Cognitive and Affective Biases in Medicine (alphabetically) Pat Croskerry MD, PhD, FRCP(Edin), Critical Thinking Program, Dalhousie University Aggregate bias: when physicians believe that aggregated data, such as those used to develop clinical practice guidelines, do not apply to individual patients (especially their own), they are exhibiting the aggregate fallacy. The belief that their patients are atypical or somehow exceptional, may lead to errors of commission, e.g. ordering x-rays or other tests when guidelines indicate none are required. Ambiguity effect: there is often an irreducible uncertainty in medicine and ambiguity is associated with uncertainty. The ambiguity effect is due to decision makers avoiding options when the probability is unknown. In considering options on a differential diagnosis, for example, this would be illustrated by a tendency to select options for which the probability of a particular outcome is known over an option for which the probability is unknown. The probability may be unknown because of lack of knowledge or because the means to obtain the probability (a specific test, or imaging) is unavailable. The cognitive miser function (choosing an option that requires less cognitive effort) may also be at play here. Anchoring: the tendency to perceptually lock on to salient features in the patient’s initial presentation too early in the diagnostic process, and failure to adjust this initial impression in the light of later information. This bias may be severely compounded by the confirmation bias. Ascertainment bias: when a physician’s thinking is shaped by prior expectation; stereotyping and gender bias are both good examples. Attentional bias: the tendency to believe there is a relationship between two variables when instances are found of both being present.
    [Show full text]