Measuring decision-analytical competence : a psychometric online performance test

Abstract

Decision-making is generally considered a key competence within organisations and for individuals. It is crucial in our daily routine and at forks in life. The latter type of situation can tremendously impact peoples’ health, wealth, or happiness. Thus, the extent to which an individual is able to make sound decisions is of huge interest. Measuring this ability would enable people to assess their DecisionMaking Competence (DMC) and identify areas for improvement. Most advanced research on individual differences in DMC defines the construct mainly in terms of an individual’s ability to resist decision biases - systematic deviations from normative decision rules and a concept that is mainly derived from behavioural decision theory. This research stream does not typically cover the main steps of a decision-analytical process, such as the ability to envision one’s objectives, to frame a decision, or to compare alternatives. As a sound decisionmaking process must cover several dimensions, including not only the ability to deal with decision biases but also the ability to apply decision-analytical rules, the decision-analytical side of this construct deserves intensified investigation. This research therefore developed a psychometric test that allows the measurement of an individual’s performance by a set of six decision-analytical dimensions of DMC. On the basis of the corresponding decision-analytical literature, cognitive dimensions of analytical DMC were identified and operationalized using a catalogue of appropriate decision tasks. In two online studies with approximately 500 participants, a psychometrically sound performance test was constructed and validated. Participants showed reasonable consistent performances across the set of Decision-Analytical Competence (DAC) tasks. An exploratory factor analysis suggested one factor underlying the presented decision tasks. A confirmatory factor analysis demonstrated acceptable model fit indices for the one-factor structure of DAC. The aggregated overall test score presented significant relationships with measures of decision-making style, fluid intelligence, and problem-solving competence.