Judgment And Decision Making Research Articles

Mitigating Cognitive Bias to Improve Organizational Decisions: An Integrative Review, Framework, and Research Agenda

The detrimental influence of cognitive biases on decision-making and organizational performance is well established in management research. However, less attention has been given to bias mitigation interventions for improving organizational decisions. Drawing from the judgment and decision-making (JDM) literature, this paper offers a clear conceptualization of two approaches that mitigate bias via distinct cognitive mechanisms—debiasing and choice architecture—and presents a comprehensive integrative review of interventions tested experimentally within each approach. Observing a lack of comparative studies, we propose a novel framework that lays the foundation for future empirical research in bias mitigation. This framework identifies decision, organizational, and individual-level factors that are proposed to moderate the effectiveness of bias mitigation approaches across different contexts and can guide organizations in selecting the most suitable approach. By bridging JDM and management research, we offer a comprehensive research agenda and guidelines to select the most suitable evidence-based approach for improving decision-making processes and, ultimately, organizational performance.

Analyzing the Factors That Affect Auditor’s Judgment and Decision Making in Lebanese Audit Firms

The exercise of audit judgment is essential because it is impractical to perform an audit on all types of evidence. These types of evidence are considered in forming an opinion on audited financial statements, making audit judgment a determinant of the audit’s outcome. The objective of this research is to analyze the factors that affect an auditor’s judgment and decision making (JDM) during an audit. This study used an exploratory research design, with the factor analysis approach as its methodology. However, the data were collected using the questionnaire method. The questionnaire was sent to all member auditors of the Lebanese Association of Certified Public Accountants (LACPA). A total of 310 completed questionnaires were collected and analyzed. The data analysis findings indicate that the auditor’s JDM throughout the audit process is affected by three factors: personal, task, and environmental factors. The auditor’s personal factor becomes the dominant factor because it has the largest eigenvalue of 7.949. These findings demonstrate the complex and diverse nature of auditor judgment, highlighting the significance of considering audit JDM factors. Therefore, auditors may improve their abilities to make informed and effective judgments throughout the audit process by acknowledging the importance of personal, task, and environmental factors.

Auditors’ Work Attitudes: Translating Auditor JDM Research Findings to Inform Audit Firms’ Strategies

SYNOPSIS Audit firms are undertaking tremendous efforts to improve auditors’ work attitudes as one approach to tackling talent shortages. We present an auditors’ work attitudes framework to help practitioners identify relevant research from auditor judgment and decision-making (JDM) studies and to translate these findings for application to practice. Practitioners might overlook auditor JDM research because it tends to focus on individual auditor tasks and performance outcomes rather than firm-wide practices. Nonetheless, it may serve as a relevant source of evidence to inform firms’ strategies. We use illustrative examples of auditor JDM studies to demonstrate how firms can apply our auditors’ work attitudes framework to firm initiatives, such as employee surveys and audit work designs. Our framework also helps researchers identify gaps in scholarly work on auditors’ work attitudes.

COVID-19: judgment and decision making on CSR

Judgment and decision making (JDM) research in accounting focuses on the judgment and decision of prepares, user and auditor providers of financial and non-financial information, including sustainability information. The environment in which these judgment are made and how groups interact has changed substantially during the Covid-19 pandemic, ang likely post-pandemic. We focused on the impact these changes for corporate social responsibility (CSR) reporting, including manager decision on the preparation and use CSR information, and the effect of CSR reports and assurance on investors judgement.

Estimating reliability of scale development in money mule risk assessment among financial crime compliance officers

The threat of money mule syndicate continues to undermine the stability of financial system. Over the years, money mule syndicate has helped to launder ill-gotten funds by colluding as intermediary. The defense of financial system from ensuing money mule problem lies in the responsibility of financial crime compliance officers. Submission of Suspicious Activity Report (SAR) by these officers helps in combatting money mule phenomenon at the enforcement level. Hence, the building of money mule risk assessment among financial crime compliance officers is unequivocally critical. This paper presents the estimation of reliability of instrument developed to measure the novel money mule risk assessment based on Judgment and Decision Making (JDM) theory. Professional self-awareness, task complexity and AML software astuteness are the constructs influencing financial crime compliance officers’ risk assessment in money mule investigation at bank’s level. An instrument with 118 items was developed and disseminated digitally for pilot test. The distribution of instrument targeted financial crime compliance officers working for financial institutions in Malaysia. A total of 31 respondents from commercial banks in Malaysia participated in the pilot test. The four constructs score Cronbach’s values above 0.80 which show good and satisfactory reliability for the next phase of data collection.

Virtuous opinion change in structured groups

Abstract Although the individual has been the focus of most research into judgment and decision-making (JDM), important decisions in the real world are often made collectively rather than individually, a tendency that has increased in recent times with the opportunities for easy information exchange through the Internet. From this perspective, JDM research that factors in this social context has increased generalizability and mundane realism relative to that which ignores it. We delineate a problem-space for research within which we locate protocols that are used to study or support collective JDM, identify a common research question posed by all of these protocols—‘What are the factors leading to opinion change for the better (‘virtuous opinion change’) in individual JDM agents?’—and propose a modeling approach and research paradigm using structured groups (i.e., groups with some constraints on their interaction), for answering this question. This paradigm, based on that used in studies of judge-adviser systems, avoids the need for real interacting groups and their attendant logistical problems, lack of power, and poor experimental control. We report an experiment using our paradigm on the effects of group size and opinion diversity on judgmental forecasting performance to illustrate our approach. The study found a U-shaped effect of group size on the probability of opinion change, but no effect on the amount of virtuous opinion change. Implications of our approach for development of more externally valid empirical studies and theories of JDM, and for the design of structured-group techniques to support collective JDM, are discussed.

Auditors’ Perception of Their Regulator Within Their Social Group

Although copious literature exists on the judgment and decision-making (JDM) process, there is primarily anecdotal research on the personal perception of a regulatory body, such as the US Public Company Accounting Oversight Board (PCAOB). However, none have investigated its statistical impact on experts’ evaluation of another expert’s decision. A survey was conducted on 74 experienced auditors’ in-group members’ judgments and their perception of the regulator (PCAOB) to better understand the social group’s impact on professional judgments. The results reveal auditors’ evaluative decisions are positively associated with their perceptions of the regulator, inspection reports usage, and views of the PCAOB’s effectiveness.

Individual Differences in Judgment and Decision-Making: Novel Predictors of Counterproductive Work Behavior.

The current paper proposed individual differences in judgment and decision-making (JDM)-namely, the skill associated with recognizing social norms, decision-making styles, and risk-benefit perceptions-as a novel set of predictors of counterproductive work behavior (CWB). We hypothesized that the skill associated with recognizing social norms, rational decision-making style, and perceived riskiness of unethical behavior would be related negatively to CWB, whereas the avoidant decision-making style, spontaneous decision-making style, and perceived benefits of unethical behavior would be related positively to CWB. Moreover, we hypothesized that JDM-focused individual differences would exhibit incremental validity above and beyond the traditional individual difference predictors of CWB (personality, trait affect, and cognitive ability). Results from three independent samples provided strong support for the hypotheses. The strongest predictor of CWB was individual differences in perceived benefits of unethical behavior (meta-analytic correlation across the three samples = .487). This result suggests a simple insight, yet one almost completely missing from the existing CWB literature: People who believe unethical behavior is likely to benefit them will tend to enact more CWB than those who do not. Additionally, across the three samples, the novel JDM-focused individual difference predictors performed well in comparison to the traditional individual difference predictors, suggesting their usefulness to research and practice. We therefore suggest several avenues for future research on JDM-focused individual differences as predictors of CWB. Additionally, vis-à-vis practical implications, we discuss the possibility of using JDM-focused individual differences in employee selection and organizational intervention contexts with the aim of reducing CWB.

Earmarking space: relationality, economic judgments and housing wealth

Abstract Housing wealth is the single largest portion of household wealth in most Western societies today, yet little research has examined how individuals make decisions regarding the use of the housing wealth that they possess. In this article, we leverage insights from relational economic sociology to understand how individuals’ subjective valuations and other economic judgments are influenced when space in a home is relationally earmarked. Using a series of original vignette experiments and survey tasks in conjunction with qualitative responses, we find that earmarking a room for a close social tie does indeed matter for valuation. Furthermore, we reveal that individual economic judgments are strongly influenced by different relational content associated with relational earmarks compared to a control. Put differently, we systematically show how modifying the constitution of an earmark strengthens or lessens the appropriateness of its match and prompts distinct patterns of economic decision-making. Our analyses extend relational economic sociology to studies of housing while also building intellectual bridges with research on judgment and decision-making (JDM).

The Development Of Professional Judgment Research

The auditor's professional judgment quality is essential to maintain and improve. Therefore, careful judgment by an independent third-party can assist the company in its operations. The purpose of this research is to see the development of judgment and decision-making (JDM) in Indonesia and its benefits in improving the quality of auditor judgment, especially auditors in the Indonesian supreme audit institution environment. This thinking is based on that (1) there has been a shift in JDM audit research from a normative model to a cognitive process (2) human cognition is limited, so a cognitive strategy is needed to assist humans in making quality judgments. This study guides designing effective empirical research using this conceptual framework. The framework adopted from this research helps improve the auditor's understanding of the appraisal process that can assist the auditor's appraisal performance by providing a practical suggestion through a cognitive strategy. The result of this research is that the personality factor is one of the factors that influence the auditor's assessment. Certain behaviors are more likely to occur if associated with high expectations and motivational reinforcement. Motivation is linearly related to individual expectations. Future researchers are expected to determine which type of character should be displayed higher. When researchers know which characters can stand out in improving performance, providing motivational reinforcement for the whole individual will be effective. Individual motivation will cause human cognition to be better because there is an urge to direct maximum thinking skills to get the best work results.

When the eyes have it and when not: How multiple sources of activation combine to guide eye movements during multiattribute decision making.

Memory plays a major but underexplored role in judgment and decision making (JDM). Studying eye movements-especially how people look at empty spatial locations when retrieving from memory information previously associated with those locations-provides useful information about how memory influences JDM. This so-called looking-at-nothing behavior is thought to reflect memory-driven allocation of attention. However, eye movements are also guided toward salient visual stimuli, such as test items presented on a screen. It is unclear how these multiple sources of activation combine to guide looking-at-nothing in JDM. We investigated this question in two experiments in which participants solved multiattribute categorization tasks using an exemplar-based decision strategy. In the first experiment, we tested how the occurrence and the strength of looking-at-nothing vary with the presentation format and the amount of training participants received. Looking-at-nothing occurred during categorizations when test-item information was presented auditorily and visually, but for the latter only after visual information was removed from the screen. It occurred both when training items were learned by heart and when they were presented 10 times on the screen. A second experiment revealed that an explicit instruction to imagine retrieval-relevant information during categorizations increased looking-at-nothing but did not change the decision-making process. The results shed light on the interaction between eye movements and attention to information in memory during JDM that can be explained in light of a shared priority map in memory. A detailed understanding of this interaction forms the basis for using eye movements to study memory processes in JDM. (PsycInfo Database Record (c) 2022 APA, all rights reserved).

Norms for Behavioral Change (NBC) model: How injunctive norms and enforcement shift descriptive norms in science

In this article, we introduce the Norms for Behavior Change model (NBC) to explain how injunctive norms coupled with enforcement promote community-level behavior change. We examine the NBC model in the context of open science. We conceptualize journal submission requirements as injunctive norms, and the shift towards open science as a profound change in descriptive norms of publishing for communities of scholars. We conducted two pilot studies and three main studies to examine the uneven adoption of open science practices across different behavioral sciences, which include Organizational Behavior (OB), Judgment and Decision Making (JDM), and psychology. In our first pilot study, we identify how actual injunctive norms about open science are particularly weak in OB because the majority of OB journals do not have explicit requirements for open science. In our second pilot study, we find that a substantial proportion of OB faculty view open science to be unhelpful for advancing the field. In Study 1, we survey OB faculty and JDM faculty, and find that OB faculty perceive injunctive and descriptive norms of publishing as less likely to include open science practices compared to JDM faculty. In Study 2, we code open science practices across OB and psychology journals in an archival data set, and demonstrate that the actual descriptive norms of publishing are less likely to adhere to open science practices in OB journals than psychology journals (where JDM researchers publish). In Study 3, we analyze an archival data set of preregistrations onaspredicted.org, and find that actual descriptive norms of open science are more likely to be adopted by experimentalists than non-experimentalists. Taken together, our work establishes the link between norms and behavioral change, and provides prescriptive advice on how to leverage injunctive norms to shift descriptive norms towards constructive community-level behaviors.

The causal impact of objective numeracy on judgments: Improving numeracy via symbolic and non-symbolic approximate arithmetic training yields more consistent risk judgments

Park and Brannon (2013, https://doi.org/10.1177/0956797613482944) found that practicing non-symbolic approximate arithmetic increased performance on an objective numeracy task, specifically symbolic arithmetic. Manipulating objective numeracy would be useful for many researchers, particularly those who wish to investigate causal effects of objective numeracy on performance. Objective numeracy has been linked to performance in multiple areas, such as judgment-and-decision-making (JDM) competence, but most existing studies are correlational. Here, we expanded upon Park and Brannon’s method to experimentally manipulate objective numeracy and we investigated whether numeracy’s link with JDM performance was causal. Experimental participants drawn from a diverse internet sample trained on approximate-arithmetic tasks whereas active control participants trained on a spatial working-memory task. Numeracy training followed a 2 × 2 design: Experimental participants quickly estimated the sum of OR difference between presented numeric stimuli, using symbolic numbers (i.e., Arabic numbers) OR non-symbolic numeric stimuli (i.e., dot arrays). We partially replicated Park and Brannon’s findings: The numeracy training improved objective-numeracy performance more than control training, but this improvement was evidenced by performance on the Objective Numeracy Scale, not the symbolic arithmetic task. Subsequently, we found that experimental participants also perceived risks more consistently than active control participants, and this risk-consistency benefit was mediated by objective numeracy. These results provide the first known experimental evidence of a causal link between objective numeracy and the consistency of risk judgments.

Using LIWC to Analyze Participants' Psychological Processing in Accounting JDM Research

SUMMARY This paper provides methodological guidance for judgment and decision-making (JDM) researchers in accounting who are interested in using the Linguistic Inquiry and Word Count (LIWC) text analysis program to analyze research participants' written responses to open-ended questions. We discuss how LIWC's measures of psychological constructs were developed and validated in psycholinguistic research. We then use data from an audit JDM study to illustrate the use of LIWC to guide researchers in identifying suitable measures, performing quality control procedures, and reporting the analysis. We also discuss research design considerations that will strengthen the inferences drawn from LIWC analysis. The paper concludes with examples where LIWC analysis has the potential to reveal participants' deep, complex, effortful psychological processing and affective states from their written responses.

Comparing Assessment Methods of Attribute Importance in Teachers’ Decisions: The Importance of Different Criteria for Tracking Recommendations after Primary School

The importance of different criteria for tracking recommendations is usually inferred using regression weights as a cross-student measure. The few studies that have applied alternative approaches or differentiated between student groups sometimes reach different conclusions. According to research on judgment and decision making (JDM), different methods operationalize different facets of importance. Given this, we investigate whether the importance of criteria for tracking recommendations depends on a direct vs. indirect operationalization (regression weights vs. ratings). A total of 181 teachers selected four students from their most recent fourth-grade class using a 2 × 2 design (certain vs. uncertain qualification for the Realschule (vocational track) vs. the Gymnasium (academic track)). Then, they reported on the level and the importance of predetermined criteria for each student. Contrary to JDM research, we found few method-related differences, but striking differences between cases with a certain vs. an uncertain qualification. For the latter, the importance of the criteria is more homogeneous, the regression prediction is less successful and the importance varies with the dependent variable in the regression (actual recommendation vs. perceived qualification). We conclude that further research should focus on uncertain cases rather than method-related differences and suspect that, in uncertain cases, the formation of the recommendation is a multistage decision process.

The futility of decision making research

We have each spent more than 50 years doing research that has had little impact. Even more lamentable is that our field, judgment and decision making (JDM), has on the whole had little impact during that span. We attribute that failure to the use of methodologies that emphasize testing models rather than looking for differences in behavior. The “cognitive revolution” led the field astray, toward the goal of studying model fit rather than comparing observable results. With modeling as the goal, experimentation was stultified. Simple tasks became dominant. Although a poor metaphor for real decision making, the gambling paradigm has lasted forever because the inputs to the decision are known to the researcher and thus easily modeled.

Group Judgment and Decision Making in Auditing: Research in the Time of COVID-19 and Beyond

SUMMARY The COVID-19 pandemic has fundamentally changed how auditors work and interact with team members and others in the financial reporting process. In particular, there has been a move away from face-to-face interactions to the use of virtual teams, with strong indications many of these changes will remain post-pandemic. We examine the impacts of the pandemic on group judgment and decision making (JDM) research in auditing by reviewing research on auditor interactions with respect to the review process (including coaching), fraud brainstorming, consultations within audit firms, and parties outside the audit firm such as client management and the audit committee. Through the pandemic lens and for each auditor interaction, we consider new research questions for audit JDM researchers to investigate and new ways of addressing existing research questions given these fundamental changes. We also identify potential impacts on research methods used to address these questions during the pandemic and beyond.

Judgment and decision making research on CSR reporting in the COVID‐19 pandemic environment

Judgment and decision making (JDM) research in accounting focuses on the judgments and decisions of preparers, users and auditors/assurance providers of financial and non‐financial information, including sustainability information. However, the environment in which these judgments are made and how groups interact has changed substantially during the COVID‐19 pandemic, and likely post‐pandemic. We focus on the impact of these changes for corporate social responsibility (CSR) reporting, including managers’ decisions on the preparation and use of CSR information, demand for CSR assurance, and the effect of CSR reports and assurance on investors’ judgments. We then outline implications for the research questions addressed and experimental designs used.

On salesperson judgment and decision making

Prior research on salesperson judgment and decision making (JDM) has been fragmented. After identifying how salespeople uniquely differ from other decision makers and unpacking how various personal selling issues can benefit from research in the JDM domain, the authors provide a framework to guide future research on salesperson JDM. The framework includes a research idea generation template to facilitate the identification of theoretically and substantively important research questions about salesperson JDM.

Effect of Trust between the Time Pressure and Complexity in Judging and Decision-Making in Auditing

ABSTRACT Objective: the study aimed to assess the moderating effect of confidence in the joint influence of time pressure and complexity in judgment and decision-making (JDM) in auditing. The behavioral decision theory (BDT) was used from the perspective of the anchoring heuristic. Methods: as a method, the 2x2x2 experiment was used with a final sample of 126 independent auditors. For analysis, the t-test and multiple linear regressions were used. Results: the findings allow us to infer that factors such as trust, time pressure, and complexity, individually and jointly, influence JDM. The study showed that trust moderates the joint influence of time pressure and complexity on JDM. Time pressure and task complexity negatively influence JDM, but when including trust as a moderating factor, the effect of time pressure and complexity is mitigated, reducing the auditor’s difficulties and uncertainties in JDM. Conclusion: the study contributes to BDT, moving academic research toward understanding the interrelationships between personal, environmental, and task factors. It also contributes by presenting evidence that there is a need for considering and observing the effects generated by the factors altogether, in order to contribute to improving the quality of the audit.