Redundant Information and Decision Making

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Redundant Information and Decision Making

Kate Ranganath

Search Criteria: Redundant Information and Processing, Redundant Information and

Decision-Making

Relevant Readings and Summary (credit goes to Lee for the first three):

Soll (1999). Intuitive theories of information: Beliefs about the value of redundancy.

Cognitive Psychology 38, 317-346.

Examines the question as to whether or not people prefer high or low redundancy with respect to sources of information. Soll suggests that past research is mixed, and he provides an individual differences explanation for redundancy preference.

The thinking goes like this: Some people prefer to minimize measurement error by sampling the same source more than once. Others prefer to minimize bias by sampling different sources. (He refers to the latter strategy as normatively correct, because one can minimize both measurement error and bias by sampling unique sources.) In my mind, this sounds like reliability vs. validity or precision vs. accuracy. Soll finds that science majors, for example, are more likely to take the normatively correct approach.

Here's an interesting example of the problem: Suppose you are soliciting investment advice, and you have purchased the opinion of Analyst A. You have budgeted funds for one more opinion, and you must decide between Analysts B and C. Analyst B works at the same firm as A, uses a similar stock picking methodology, and has access to the same information. Analyst C works alone. Whom do you choose?

Gonzalez, R. (1994). When words speak louder than actions: Another’s evaluations can appear more diagnostic than their decisions. Organizational Behavior and Human

Decision Processes, 58, 214-245.

Gonzalez presents 5 studies in which participants were asked to reallocate stock portfolios based on either the evaluations or decisions of previous (fictitious) participants who have access to the same (high redundancy) or unique (low redundancy) information available to the participant. He finds that subjects tend to differentiate with respect to redundancy (i.e., "correctly" prefer low redundancy) only when the previous participant is making an evaluation but not a decision about stocks. The explanation involves a salience hypothesis in which evaluations (but not decisions?) highlight redundancy by making the information upon which an opinion is based salient.

Evaluations based on unique information therefore become more diagnostic to the participant.

Beyond redundancy, the article talks about a couple of additional factors that drive participant decisions. First, there is a big conformity effect. Participants who saw others' decisions (or evaluations) of stocks made similar allocation decisions relative to those who did not see any previous participant decisions. Second, consistency provides a main effect. Participants who saw decisions that were consistent with their own information (i.e. the stock report they read

suggests "buy" and the previous participants decided to buy) were more likely to act in a similar way to the previous participants.

Slovic, P. (1966). Cue consistency and cue utilization in judgment. American Journal of

Psychology, 79, 427-434.

Slovic shows that if 2 pieces of information (cues) are consistent, they will both be used in judgments. If they conflict, participants will look to other cues for the basis of their judgments.

He describes a study in which participants are asked to judge intelligence based on 9 cues. Past studies indicated that subjects primarily relied on 2 cues, high school grades and English effectiveness (EE). Therefore, these 2 cues were manipulated to either be consistent (e.g., high grades and high EE) or inconsistent (e.g., high grades but low EE). As hypothesized, the proportion of the variance accounted for by both cues (together and individually) was higher when the cues were consistent.

One must bear in mind (as Soll and Gonzalez point out) that redundancy of information source and cue consistency are not the same thing.

Heller, R.F., & Saltzstein, H.D. (1992). Heuristics in medical and non-medical decisionmaking. The Quarterly Journal of Experimental Psychology, 44A, 211-235.

The purpose of the part of this research relevant to our project concerns whether first, second, and third year medical students correctly disregard redundant information in diagnosing medical conditions based on a list of symptoms, and in a task that is not related to medicine. Another manipulated variable was whether the information was presented in the form of a list or contextually embedded in a paragraph.

The materials used in this study were short vignettes. In the medical vignettes a list of patient symptoms were presented; in the redundant condition, some of the symptoms were synonymous with other conditions on the list (e.g. insomnia, stomach pain, and an inability to sleep due to stomach pain). The participants were asked to give a diagnosis (which was irrelevant and not used) and to state their degree of confidence in the diagnosis (the primary DV). The nonmedical vignettes were descriptions of an individual’s personality characteristics; again, some words were synonymous with others on the list (e.g. shy and doesn’t like to socialize). The participants were required to state the type of graduate program the person would best be suited to (not used) and how confident they felt with their placement (the primary DV). – THESE ARE

REALLY INTERESTING AND COULD BE USED IN FUTURE RESEARCH.

It was found that first-year medical students relied on redundant information for medical diagnoses more than second and third year students (though there was a main effect for everyone), and that this was more true of information contained in a paragraph than information presented in list form. Training level did not affect the occurrence on the non-medical data

(everyone showed the main effect).

Maines, L. (1996). An experimental examination of subjective forecast combination.

International Journal of Forecasting, 12, 223-233.

The purpose of this study was to investigate how individuals subjectively combine forecasts, particularly, how the process is affected by the decision context, and by the characteristics of the individual forecasters.

Participants were given three forecast predictions from three different financial analysts, for the sales of company XYZ. The participants were asked to combine the three opinions and to indicate one number that best represented their estimate for the company’s sales (the DV). The

IV was the purpose for which the forecast was going to be used. Half of the participants thought the forecast was going to be used to decide which stock to invest the pension funds of the company’s employees (designed to invoke conservative forecasts) or to put in the company’s new brochure (designed to invoke more liberal forecasts). In the second study, the same info was used, but participants also were given information about the historical accuracy and dependence of the three forecasters.

It was found that in general, participants took the average of the 3 forecasters to reach a decision; however, he purpose for which the participant thought the forecast was going to be used affected whether they adjusted their forecast slightly up or down, approximately from the mean of the 3 forecasters. Further, it was found in study 2 that participants adjusted somewhat based on the historical accuracy of forecasters, but not on the forecasters’ interdependence (redundancy).

Also, if given the historical accuracy of forecasters, the tendency to shift up or down based on the purpose of the forecast disappears.

Kahneman, D., & Tversky, A. (1973). On the psychology of prediction. Psychological

Review, 80, 237-251.

Lots of complicated stuff on base rates, but the important thing to know for our purposes is that they found people to (incorrectly) value highly redundant information more than non-redundant information (had participants predict GPA from either all science grades or all classes and then say how confident).

Gilliand, S.W., & Schmitt, N. (1993). Information redundancy and decision behavior: A process tracing investigation. Organizational Behavior and Human Decision Processes,

54, 157-180.

Participants were asked to examine selecting the best job from 10 job descriptions, with 10 descriptive items each, on the computer. Half of the descriptive items were redundant (e.g. time until promotion, opportunity for advancement, chance of becoming a manager, etc.) and half were unique.

The authors differentiated between expected redundancy (the actual values of the items) and expected redundancy (similarity based on the dimension labels in the example above).

The authors were operating under the assumption that people would use redundant information inappropriately (which they found); they were concerned with the process behind this. They had participants complete the items on the computer so they could examine the amount of time spent

on each of the pieces of the descriptions, how many pieces of the information they looked at, and the pattern of their search (the primary DVs). They also manipulated whether or not participants were under time pressure.

It was found that:

1. Participants looked at less pieces of the redundant information, but looked at them for longer

2. Participants recognize redundancy and look at less pieces of redundant information (even thought it affects their judgment)

3. Time constraints affected depth and latency of search (in other words, moderated items 1 & 2)

4. People tend to trust their prior theories rather than heeding disconfirming evidence**

Lynch, J.G., & Ofir, C. (1989). Effects of cue consistency and value on base-rate

utilization. Journal of Personality and Social Psychology, 56, 170-181.

Other relevant readings:

Oskamp (1962). The relationship of clinical experience and training methods to several criteria of clinical prediction. Psychological Monographs, 76.

Found greater confidence with increasing amounts of data, even when the additional data were redundant.

Summary of what I’ve found and general ideas for future research:

Although there are some exceptions, most of the literature indicates that people incorrectly give more weight to information that is redundant than they do to less pieces of information that is not redundant. Very little of the research is concerned with WHY this happens.

It is my theory (based on some research and some lay-theorizing) that one reason why this might happen is due to confirmation bias – people like to find information that confirms what they already think. So, for example, the participant reads the first description of the individual’s personality (as in the Heller & Saltzstein paper), and immediately has a theory about it. The additional information, even though redundant, serves to reinforce that original idea, thereby increasing confidence in it. Maybe this could be partially tested by having participants give confidence ratings at two time points, rather than only at the end.

Further, I bet this would interact with individual need for cognitive closure, with those individuals higher in need for cognitive closure valuing redundant information more.

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