An Experimental Method for Studying Complex Choices

Abstract

AbstractThe promise of computational decision aids, from review sites to emerging augmented cognition technology, is the potential for better choice outcomes. This promise is grounded in the notion that we understand human decision processes well enough to design useful interventions. Although researchers have made considerable advances in the understanding of human judgment and decision making, these efforts are mostly based on the analysis of simple, often linear choices. Cumulative Prospect Theory (CPT), a famous explanation for decision making under uncertainty, was developed and validated using binary choice experiments in which options varied on a single dimension. Behavioral science has largely followed this simplified methodology. Here, we introduce an experimental paradigm specifically for studying humans making complex choices that incorporate multiple variables with nonlinear interactions. The task involves tuning dials, each of which controls a different dimension of a nonlinear problem. Initial results show that in such an environment participants demonstrate classic cognitive artifacts, such as anchoring and adjusting, along with falling into exploitive traps that prevent adequate exploration of these complex decisions. Preventing such errors suggest a potentially valuable role for deploying algorithmic decision aids to enhance decision making in complex choices.KeywordsComplex choiceJudgment and decision makingBehavioral economicsDecision aids