Columbia University

PSYC W4285, G9180, and Business B 9611-016

MULTIDISCIPLINARY APPROACHES TO HUMAN DECISION MAKING

Thursdays 5:15-6:30
416 Warren (aka Business Law, at 115th & Amsterdam)

Instructor:

Elke Weber 402B Schermerhorn (4-1789);

716 Uris (212-854-4427)

euw2@columbia.edu

Office Hours: Wednesdays, 9-10 am, and by appointment

General Course Description:

This ongoing weekly seminar serves as a focal point for bringing together the decision science community at Columbia. The seminar can be taken for credit as a graduate or advanced undergraduate course but is open to all scholars interested in decision making. Our meetings take several forms, including introductions to topic areas by Columbia faculty, guest speakers (often leading researchers in their fields), and discussions. We occasionally schedule all three types of meetings for a given topic to create a module including an introduction, a guest speaker, and a wrap-up discussion. For a schedule of the seminar, visit http://www.cebiz.org/cds/seminar.htm.

More Details:

Human decision making is studied by many disciplines, including psychology, economics, statistics, political science, public policy, and business. Studied problems and analyses include such areas as environmental risk assessment and management, organizational and consumer behavior, public policy formulation, and medical decision making. Behavioral decision theory attempts to formulate models of human behavior that are closer to actual decision behavior than existing normative models.

The seminar is designed to draw together Columbia graduate students and faculty from disciplines that are part of the decision sciences to exchange ideas and to work towards a broader and deeper understanding of human decision processes. Its specific aims are: (a) to provide students and researchers from different disciplines with general background knowledge about the scope, aims, and methods of research in the decision sciences; (b) to examine decision making from different disciplinary perspectives; and (c) to feature several distinguished speakers each semester, who will present current basic and applied research in a range of sub-disciplines. A list of speakers and topics for the upcoming (and past) semesters can be found at http://www.cebiz.org/cds/seminar.htm.

Detailed course content will vary from semester to semester, depending both on the expertise and interests of organizers and outside speakers. The focus of most talks and lectures will be actual (usually human) behavior, but connections are typically made to normative and prescriptive analyses of the judgment or choice tasks under study.

Course Requirements:

Graduate students and advanced undergraduates can register for 1-3 points, for repeated credit in different semesters, with the permission of the instructor. We expect everybody to participate in the general discussion following each talk. Speakers typically submit a paper on their talk ahead of time, that is posted on the CDS website provided above. Registered students should attempt to read the paper ahead of time and come prepared with questions for the speaker.

Registered students are also required to discuss a reading or research project with the instructor at the beginning of the semester (usually in the first class) and to turn in a final paper on their project, the scope of which will be proportionate to the number of credit points. The following pages suggest some background reading as well as references to a subset of specific topics. They are reference materials, not required readings. An individual reading plan will be worked out in consultation with the instructor.

General Background Books

Baron, J. (2000). Thinking and Deciding. New York: Cambridge University Press.

Clemen, R. T. (1996). Making Hard Decisions: An Introduction to Decision Analysis. Belmont, CA: Duxbury Press.

Damasio, A. R. (1994). Descartesí Error: Emotion, Reason, and the Human Brain. New York: Putnam.

Gigerenzer, G., & Selten, R. (Eds.) (2001). Bounded rationality: The adaptive toolbox. Cambridge, MA: MIT Press.

Hastie, R., & Dawes, R. (2001). Rational Choice in an Uncertain World. Thousand Oaks, CA: Sage.

March, J. G. (1994). A Primer on Decision Making. New York: The Free Press.

Nisbett, R., & Ross, L. (1980). Human Inference: Strategies and shortcomings of social judgment.

Englewood Cliffs, NJ: Prentice Hall.

Payne, J. W., Bettman, J. R., & Johnson, E. J. (1993). The adaptive decision maker. Cambridge, UK:

Cambridge University Press.

Plous, S. (1993). The Psychology of Judgment and Decision Making. New York: McGraw-Hill.

Yates, J. F. (1990). Judgment and Decision Making. Englewood Cliffs: Prentice Hall.

Book Collections of JDM/BDT Papers

Arkes, H. R. & Hammond, K. R. (Eds.) (1986). Judgment and decision making: An interdisciplinary reader.

Cambridge, UK: Cambridge University Press.

Gilovich T., Griffin, D., & Kahneman, D. (Eds.) (2002). Heuristics and Biases : The Psychology of Intuitive Judgment.

Cambridge, UK: Cambridge University Press.

Goldstein, W. M., & Hogarth, R. M. (Eds.) (1997). Research on Judgment and Decision Making. Cambridge,

UK: Cambridge University Press.

Kahneman, D. & Tversky, A. (Eds.) (2000). Choices, Values, and Frames. Cambridge, UK: Cambridge

University Press.

Klein, G. A., Orasanu, J., Calderwood, R., & Zsambok, C. E. (1993). Decision Making in Action: Models

and Methods. Norwood, NJ: Ablex Publishing Corporation.

Loewenstein, G., & Elster, J. (Eds.) (1992). Choice over time. New York, NY: Russell Sage Foundation.

Shapira, Z. (Ed.) (1997). Organizational Decision Making. Cambridge, UK: Cambridge University Press.

Thaler, R. H. (1992). The Winnerís Curse: Paradoxes and Anomalies of Economic Life. Princeton, NJ:

Princeton University Press.

Weber, E. U., Baron, J., Loomes, G. (Eds.) (2001). Conflict and Tradeoffs in Decision Making. Cambridge,

UK: Cambridge University Press.

Yates, J. F. (Ed.) (1992). Risk-taking behavior. New York: Wiley.

Readings on Selected Specific Topics

History of JDM and BDT

Einhorn, H. J., & Hogarth, R. M. (1981). Behavioral decision theory: Processes of judgment and choice.

Annual Review of Psychology, 32, 53-88.

Payne, J. W., Bettman, J. R., & Johnson, E. J. (1992). Behavioral decision research: A constructive processing

view. Annual Review of Psychology, 43, 87-131.

Simon, H. (1983). Alternative visions of rationality. In Reason in human affairs (pp. 7-35).

Stanford, CA: Stanford University Press. Reprinted in H. R. Arkes & K. R. Hammond (Eds.), Judgment

and decision making: An interdisciplinary reader. Cambridge, UK: Cambridge University Press, 1986.

Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185, 1124-1131.

Expected Utility, Prospect Theory, and Rank-Dependent Utility Theory

Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47,

263-291.

Tversky, A., & Kahneman, D. (1993). Advances in prospect theory: Cumulative representation of uncertainty.

Journal of Risk and Uncertainty, 1, .

Weber, E. U. (1997). Reasons for rank-dependent utility evaluation. Journal of Risk and Uncertainty, 14, 41-61.

Weber, E. U. (1994). From subjective probabilities to decision weights: The effect of asymmetric loss

functions on the evaluation of uncertain outcomes and events. Psychological Bulletin, 115, 228‑242.

Constructive Preference

Payne, J. W., Bettman, J. R., & Johnson, E. J. (1990). The adaptive decision maker: Effort and accuracy in

choice. In R. M. Hogarth (Ed.), Insights in Decision Making: A Tribute to Hillel J. Einhorn.

Reprinted in Goldstein, W. M., & Hogarth, R. M. (Eds.) (1997). Research on Judgment and Decision Making.

Cambridge, UK: Cambridge University Press, Chapter 5.

Tversky, A., Slovic, P., & Kahneman, D. (1990). The causes of preference reversal American Economic Review,

80, 204-217.

Montgomery, H. (1993). The search for a dominance structure in decision making: Examining the evidence.

In Klein, G. A., Orasanu, J., Calderwood, R., & Zsambok, C. E.(Eds), Decision Making in Action: Models and

Methods. Norwood, NJ: Ablex Publishing Corporation, Chapter 10.

Thaler, R. (1992). Preference reversals. Chapter 7 in The Winnerís Curse: Paradoxes and Anamolies of Economic

Life. New York: Free Press.

Tversky, A., Sattath, S., & Slovic, P. (1988). Contingent weighting in judgment and choice. Psychological Review,

95, 371-384.

Utility Elicitation and Contingent Valuation

Fischhoff, B. (1991). Value elicitation: Is there anything there? American Psychologist, 46, 835-847.

McNeil, B. J., Pauker, S. G., Sox, H. C., & Tversky, A. (1982). On the elicitation of preferences for alternative

therapies. New England Journal of Medicine, 306, 1259-1262. Reprinted in H. R. Arkes & K. R. Hammond

(Eds.), Judgment and decision making: An interdisciplinary reader. Cambridge: Cambridge University Press, 1986.

Mellers, B. A., & Cooke, A. D. J. (1996). The role of task and context in preference measurement. Psychological

Science, 7, 76-82.

Schkade, D. A. & Payne, J. W. (1994). How people respond to contingent valuation questions: A verbal protocol

analysis of willingness to pay for an environmental regulation. Journal of Environmental Economics and

Management, 26, 88-109.

Confidence and Overconfidence in Judgments and Decisions

Plous-book, Chapter 19

Yates, J. F., Lee, J.-W., & Bush, J.G. (1998). General knowledge overconfidence: Cross-national variations,

response style, and ìreality.î Organizational Behavior and Human Decision Processes, 70,87-94.

Erev, I., Wallsten, T. S., & Budescu, D. V. (1994). Simultaneous over- and underconfidence: The role of error in

judgment processes. Psychological Review, 101, 519-527.

Koriat, A., Lichtenstein, S., & Fischhoff, B. (1980). Reasons for Confidence. Journal of Experimental Psychology:

Human Learning and Memory, 6, 107-118.

Weber, E. U., Bockenholt, U., Hilton, D. J., & Wallace, B. (1999). Confidence judgments as expressions of

experienced decision conflict. Risk Decision & Policy, in press.

Motivation and Goals in Decision Making

Beach, L. R. (1993). Image theory: Personal and organizational decisions. In Klein, G. A., Orasanu, J.,

Calderwood, R., & Zsambok, C. E.(Eds), Decision Making in Action: Models and Methods. Norwood, NJ:

Ablex Publishing Corporation, Chapter 7.

Heath, C. Larrick, R. P., & Wu, G. (1999). Goals as reference points. Cognitive Psychology, 38, 79-109.

Tetlock, P. E. (1991). An alternative metaphor in the study of judgment and choice: People as politicians.

Theory and Psychology, 1(4), 451-475. Reprinted in Goldstein, W. M., & Hogarth, R. M. (Eds.) (1997).

Research on Judgment and Decision Making. Cambridge, UK: Cambridge University Press, Chapter 23.

Bottom, W. P. (1998). Negotiating risks: Sources of uncertainty and the impact of reference points on concession

making and settlements. Organizational Behavior and Human Decision Processes, , .

Higgins, E. T. (1998). Promotion and prevention: Regulatory focus as a motivational principle. In M. P. Zanna

(Ed.), Advances in Experimental Social Psychology (Vol. 30, pp. 1-46). New York: Academic Press.

Huber, V. L. & Neale, M. A. (1986). Effects of cognitive heuristics and goals on negotiator performance and

subsequent goal setting. Organizational Behavior and Human Decision Processes, 38, 342-365.

Larrick, R. P. (1993). Motivational factors in decision theories: The role of self-protection.

Psychological Bulletin, 113, 440-450.

Recognition- and Categorization-Based Decision Making

March-book, Chapter 2: Rule following.

Prelec, D. & Herrnstein, R. J. (1991). Preferences or principles: Alternative guidelines for choice. In R. J.

Zeckhauser (Ed.), Strategy and choice (pp. 319-340). Cambridge, MA: MIT Press.

Klein, G. A. (1993). A recognition-primed decision model of rapid decision making. In Klein, G. A., Orasanu, J.,

Calderwood, R., & Zsambok, C. E.(Eds), Decision Making in Action: Models and Methods. Norwood, NJ:

Ablex Publishing Corporation, Chapter 6.

Reason-based and Explanation-based Decision Making

Lipshitz, R. (1993). Decision making as argument-driven action. In Klein, G. A., Orasanu, J., Calderwood, R.,

& Zsambok, C. E.(Eds), Decision Making in Action: Models and Methods. Norwood, NJ: Ablex

Publishing Corporation, Chapter 9.

Shafir, E., Simonson, I., & Tversky, A. (1993). Reason-based choice. Cognition, 49, 11-36.

Reprinted in Goldstein, W. M., & Hogarth, R. M. (Eds.) (1997). Research on Judgment and Decision Making.

Cambridge, UK: Cambridge University Press, Chapter 2.

Shafir, E., & Tversky, A. (1992). Thinking through uncertainty: Nonconsequential reasoning and choice.

Cognitive Psychology, 24, 449-474.

Baron-book, Ch. 19, Reason-based choice.

Pennington, N. & Hastie, R. (1988). Explanation-based decision making: Effects of memory structure on judgment.

Journal of Experimental Psychology: Learning, Memory, and Cognition, 14, 521-533.

Reprinted in Goldstein, W. M., & Hogarth, R. M. (Eds.) (1997).

Research on Judgment and Decision Making. Cambridge, UK: Cambridge University Press, Chapter 16.

Simonson, I. (1989). Choice based on reasons: The case of attraction and compromise effects.

Journal of Consumer Research, 16, 158-174.

Emotions in Decision Making

Loewenstein, G.F., Weber, E.U., Hsee, C.K., & Welch, E. ((2001). Risk as feelings. Psychological Bulletin,

127, 267-286.

Lerner, J. & Keltner, D. (2000). Beyond valence: Toward a model of emotion-specific influences on judgment

and choice. Cognition and Emotion, 14, 473-494.

Elster, J. (1999). Strong feelings: Emotion, addiction, and human behavior. Cambridge, MA: MIT Press.

Schwarz, N. (1990) Feelings as information. In E.T. Higgins & R. M. Sorrentino (Eds.), Handbook of

Motivation and Cognition (pp. 527-561). New York: Guilford Press.

Epstein, S. (1994). Integration of the cognitive and the psychodynamic unconscious. American Psychologist, 49,

709-724.

Sloman, S. A. (1996). The empirical case for two systems of reasoning. Psychological Bulletin, 119, 3-22.

Frank, R. H. (1988). Passions within Reason: The strategic role of the emotions. New York: Norton.

Isen, A. (1993). Positive affect and decision making. In M. Lewis & J. M. Haviland (Eds.) Handbook of Emotions.

New York: Guilford Press. Reprinted in Goldstein, W. M., & Hogarth, R. M. (Eds.) (1997).

Research on Judgment and Decision Making. Cambridge, UK: Cambridge University Press, Chapter 18.