COGNITIVE STYLE AND THE USEFULNESS OF INFORMATION*

The desirability of a merger/acquisition alternative depends in part on the perceptions of the decision maker. What sources of information are “useful” to the decision maker & Does the set of useful information remain constant for all decision makers; if not, do individuals using similar information sets have similar information processing characteristics? Do these sets vary as feedback is obtained during the decision process? To answer these questions, graduate students participated in a modified Delphi experiment, and the resulting data were analyzed by the two-way aligned-ranks nonparametric test. These test results affirm that in a merger/acquisition scenario, decision makers with different cognitive styles prefer different sets of information and these sets vary dynamically as feedback is incorporated in the decision-making process. Furthermore, information that contains worker and community welfare considerations is identified as “useful” five times more frequently by decision makers with a “feeling” cognitive style than those with a “thinking” style.     

Decision Making in an Automated Environment: The Effects of Anonymity and Proximity with a Group Decision Support System*

Recent advances in information systems technology have made it possible to support the work of interacting groups using networked personal computers. A laboratory experiment was conducted using a group decision support system to evaluate effects of anonymity and proximity on group process in automated group problem solving. Twenty groups of four persons each performed an idea-generating task using an interactive electronic brainstorming program. This experiment's main findings were: (1) Group members working anonymously and apart generated more comments. (2) Working in the same room increased satisfaction. (3) Highest levels of perceived system effectiveness were reported under anonymity.     

An Empirical Investigation of the Effects of Decision Aids on Problem-Solving Processes*

Despite the growing number of investigations examining decision support systems (DSS), relatively few empirical studies have evaluated the effects of DSS on problem-solving processes. This study uses protocol analysis to investigate the impact of a specific decision aid on problem-solving processes in a semi-structured problem. Results indicate that decision aids influence the problem-solving processes of decision makers. The effect of a decision aid is found to be contingent on familiarity with the decision aid, task familiarity, and the interaction of these two factors. Suggestions for incorporating interaction effects and problem-solving processes into future examinations are proposed.     

SOME CAUTIONARY NOTES ON THE USE OF CONJOINT MEASUREMENT FOR HUMAN JUDGMENT MODELING*

Conjoint measurement has been suggested as a methodology that might be useful in assisting research concerned with the identification of the structural form of a judge's model. This paper synthesizes the results of some recent research that examined the robustness of this methodology. This research suggests that conjoint measurement has three major weaknesses: (1) certain biases exist when diagnosing model structure, (2) model diagnosis is limited to a small set of potential models, and (3) error substantially compromises conjoint measurement's ability to diagnose model structure. An empirical example that demonstrates some of the difficulties of using this methodology with experimental data is also presented.     

Automated Discovery in Managerial Problem Formulation: Formation of Causal Hypotheses for Cognitive Mapping

Development of knowledge acquisition techniques known as automated discovery systems has occurred in deep and narrow domains of knowledge. Automated discovery is the generation of new knowledge by a computer system on its own, without the help of another knowledge source. This paper describes research and validation of an automated discovery system for a wide and shallow domain—business management. The system continues recent advances in expert systems research which have enhanced cognitive mapping, a problem formulation tool. The system perceives the behavior of distal variables in the environment through probabilistic cues-to-causality, and generates previously unknown hypotheses by aggregating the probabilities into a single criterion of causal relatedness. The system is validated against the source code of a simulated managerial environment, and causal relationships posited by decision makers experienced in the play of the gaming simulator.     

Decision Processes for Developing Strategic Applications of Information Systems: A Contingency Approach*

Strategic applications of information systems (IS) are considered by IS researchers to be determined by contextual factors such as environmental uncertainty, and influenced by attributes of the processes preceding them, such as planning and top management support. For better management of the process leading to these applications, it is essential to understand the relationship between process attributes and contextual factors. Utilizing a contingency approach, this article takes a step toward such an understanding. Based on successful strategic IS applications from 81 large companies, it examines the relationship between the context of these applications and the decision-making process leading to them. The results indicate that the external environment is related to whether a rational or political decision-making process is used. The IS function seems to influence the use of the decision process implied by IS researchers, one in which the top management champions the strategic application, while the IS managers contribute by conducting in-depth analysis. However, the organization structure was not related to any decision process attribute. The implications of these findings for future research and practice are also discussed.     

Fading Frames: Data Presentation and Framing Effects*

This article describes three experiments that investigate the impact of data presentation on framing, which is the differential evaluation of objectively equivalent information given different frames of reference. The experiments were designed to vary the amount of information and the format of presentation (tables versus graphs) provided to the decision maker to gain an understanding of the mechanism underlying framing. The inferred information model proposed by Johnson and Levin [11] is utilized to explain the results of the three experiments in terms of the redistribution of weights attached by the decision makers to the attributes of the prospective outcomes. The results of the three experiments indicate that framing effects are observed only when the presentation of data facilitates the shifting of weights among the attributes of the available alternatives. The results further indicate that framing is eliminated as more information is displayed. However, presentation of additional information does not eliminate framing when a graphical format is utilized. Finally, no framing effects are observed when uneven amounts of information are used to describe two alternatives in the same decision task.     

Planning Forward by Looking Backward: Retrospective Thinking in Strategic Decision Making*

Retrospective thinking occurs whenever one remembers something from the past, but one can also think retrospectively about hypothetical future events, by imagining that the event has already transpired and then working backward in the mind from the future toward the present. Designers, artists, planners, and other creative individuals utilize retrospective thinking when they mentally envision the object they wish to create and then thinkabout how it might be constructed. Some theorists and some previous research have suggested that forward and backward thinking are different cognitive processes, but there has been little investigation on the nature of these differences. This article examines the literature and describes a laboratory study designed to investigate retrospective thinking as a technique for increased idea generation. Subjects (n=64) were professional planners and managers with an average business experience of over 20 years. In a planning task, significantly more ideas were generated in the retrospective thinking mode than in the prospective mode, but the ideas were not found to be of greater quality. Evidence emerged that a subset of subjects were better able to make use of the retrospective technique, suggesting that selection along with training may be appropriate for the technique's mosteffective use.     

Decisional Conflict and User Acceptance of Multicriteria Decision-Making Aids*

Despite the development of increasingly sophisticated and refined multicriteria decision-making (MCDM) methods, an examination of the experimental evidence indicates that users most often prefer relatively unsophisticated methods. In this paper, we synthesize theories and empirical findings from the psychology of judgment and choice to provide a new theoretical explanation for such user preferences. Our argument centers on the assertion that the MCDM method preferred by decision makers is a function of the degree to which the method tends to introduce decisional conflict. The model we develop relates response mode, decision strategy, and the salience of decisional conflict to user preferences among decision aids. We then show that the model is consistent with empirical results in MCDM studies. Next, the role of decisional conflict in problem formulation aids is briefly discussed. Finally, we outline future research needed to thoroughly test the theoretical mechanisms we have proposed.     

AN EMPIRICAL EXAMINATION OF THE BIASING EFFECTS OF FRAMING ON BUSINESS DECISIONS*

This paper presents results of three studies testing whether decision bias due to framing, found in consumer purchase contexts, also would occur in a business setting. In the first study, business-student subjects displayed framing-induced decision bias just as subjects had in an earlier study by Tversky and Kahneman [12]. When the consumer problem was recast into a business decision in the second study, student subjects trained to handle the problem still revealed bias, although to a lesser extent. In the third study, experienced business managers revealed the same pattern of decision bias as the student subjects. Implications of this bias for business decision makers are discussed.     

THE PREDICTIVE ABILITY CRITERION IN EXPERIMENTAL JUDGMENT RESEARCH IN ACCOUNTING*

Previous experimental judgment research in accounting has been interpreted as supportive of the linear model as an appropriate representation of decision-making behavior in nearly all of the tasks investigated. Moreover, nonlinear models have come to be viewed as adding relatively little predictive power over that provided by the linear model, even in tasks considered to be inherently nonlinear. These conclusions were based largely upon evaluating the predictive ability of the linear model in terms of statistics measuring the proportion of variance accounted for by the model. In the present paper it is argued that, since these statistics are not independent of the experimental design, it is not clear whether the high correlations are indicative of the model's success in representing decision-making processes or instead are more the result of various features of the experimental design. It is suggested that correlational tests be supplemented with qualitative tests of the predictive ability of a model. Implications for accounting are discussed.     

DUAL-METRIC MEASUREMENT OF THE IMPACT OF COMPLEXITY ON DECISION QUALITY*

Both sophisticated and unsophisticated subjects were provided either a simple or a complex cue set at random on which to base decisions. A dual-metric approach that consisted of measuring interrater consistency and cross-item variance for each subject category was used to compare the decision quality of the subjects. Although complexity and decision quality were inversely related, the sophisticated subjects performed relatively better using the complex cue set; the unsophisticated subjects performed better using the simple cue set. These findings support the notion that decision-maker and task compatibility are important to the assessment of decision quality.     

Testing Prospect Theory in a Deterministic Multiple Criteria Decision-Making Environment*

Prospect theory by Kahneman and Tversky [7] is tested in a deterministic multiple criteria decision-making context. In two experiments conducted in classroom settings subjects made pairwise preference comparisons of condominiums for sale. The results of the experiments indicate that the traditional value model did not explain the subjects' revealed preferences as well as the prospect model. We conclude that prospect theory is a reasonable model of choice for many individuals in such a context.     

The Effectiveness of Graphical Presentation for Information Extraction: A Cumulative Experimental Approach*

Three laboratory experiments were conducted to assess the relative strengths and weaknesses of bar, symbol, and line graphs for performing a variety of elementary information extraction tasks using two dependent variables, time and accuracy. The findings indicate that the degree of support provided by a particular graph format for a particular data extraction task depends on the matching of format and task in terms of their anchoring characteristics. Anchoring, in this context, refers to the phenomenon that specific and diverse parts of a graph are segmented by the reader to act as salient and relevant cues, or anchors, when different classes of information are to be extracted from the graph. A data extraction task has high x-value (y-value) anchoring if the x-axis (y-axis) component is represented in the question as either a given value or an unknown value. Conversely, a task has low x-value (y-value) anchoring if the x-axis (y-axis) component is not represented in the question as either a given value or as an unknown value. Data extraction accuracy was not significantly affected by presentation format. Bars provided the best time performance for data extraction tasks having high anchoring on both axes but were not appropriate for tasks having low anchoring on either the y axis or both the x and y axes. Line graphs tended to be worse in terms of time performance for tasks having high anchoring on both axes although they were as fast or better than other representations for tasks having low anchoring on both axes. Symbol plots appeared to possess anchoring characteristics associated with both bars and line graphs. Symbols (as with bars) tended to produce a time performance superior to that of line graphs for tasks having high anchoring on both axes; and (as with line graphs) symbols allowed faster results than bar graphs for tasks having low anchoring on either the y axis or both the x and y axes.     

Tax Professionals Belief Revision: The Effects of Information Presentation Sequence,Client Preference,and Domain Experience

Based on a belief revision model recently proposed by Hogarth and Einhorn [35], the present research investigates the effects of information presentation orders on tax professionals’ belief revisions about ambiguous tax treatments. Also examined in the study are the impacts of the tax professionals’ experience and the client's tax preference on the belief revision. The results show that the experienced tax professionals’ belief revisions are affected by the presentation order manipulations, but unaffected by the client preference manipulations. In contrast, the inexperienced tax professionals’ belief revisions display a reverse pattern.     

A Computerized Approach to Decision Process Tracing for Decision Support System Design*

We propose the use of computerized process tracing (CPT) tools as an appropriate approach for monitoring the information acquisition and evaluation phase of specific decision processes. CPT tools are unobtrusive and seem particularly relevant for evaluating certain decision tasks that may be supported by decision support systems (DSS). CPT tools can be an important component of DSS development. An information systems research taxonomy developed by previous researchers [29] [36] is used to position research work involving the methodology of CPT. Using a critique suggested by Libby [28], CPT tools are evaluated and compared to alternative process tracing tools. A brief empirical example using CPT is provided, and future uses relative to DSS are suggested. The appendix includes an example of a specific CPT tool.     

JUDGMENT POLICIES USED IN ASSESSING ENTERPRISE-ZONE ECONOMIC SUCCESS CRITERIA*

This paper reports on a study of the issue relationships and priorities used by public officials in making local economic-development policy decisions. Economic success criteria for evaluating distressed areas were compared and were found to vary in importance among officials. Policy bases of expert judges were determined. Their differences, as well as the implications of including this type of knowledge in the decision-making process, are discussed. Recommendations for a more detailed understanding of the public-policy decision process in economic development, through the use of a policy-capture approach, are made.     

EFFECTS OF INQUIRY METHODS AND AMBIGUITY TOLERANCE ON PREDICTION PERFORMANCE*

This study examined the comparative effectiveness of four inquiry methods on a financial prediction task. Inquiry methods included the expert (E), devil's advocate (DA), and dialectical inquiry (DI) techniques as well as a combined devil's advocate-dialectical inquiry (DADI) technique. Also, the moderating effects of ambiguity tolerance were considered. Results indicated that when the state of the world was opposite to the assumptions underlying a plan, the DA, DI, and DADI approaches were all superior to the E approach. Further, for high ambiguity-tolerance subjects, the DA and DADI approaches led to significantly better prediction performance than the E approach, and the superiority of the DADI approach over the DI approach was marginally significant. Results suggest that decision makers' levels of ambiguity tolerance should be considered before recommending their use of either the DA or DADI approach as an ill-structured decision-making aid.     

Cognitive Fit: A Theory-Based Analysis of the Graphs Versus Tables Literature*

A considerable amount of research has been conducted over a long period of time into the effects of graphical and tabular representations on decision-making performance. To date, however, the literature appears to have arrived at few conclusions with regard to the performance of the two representations. This paper addresses these issues by presenting a theory, based on information processing theory, to explain under what circumstances one representation outperforms the other. The fundamental aspects of the theory are: (1) although graphical and tabular representations may contain the same information, they present that information in fundamentally different ways; graphical representations emphasize spatial information, while tables emphasize symbolic information; (2) tasks can be divided into two types, spatial and symbolic, based on the type of information that facilitates their solution; (3) performance on a task will be enhanced when there is a cognitive fit (match) between the information emphasized in the representation type and that required by the task type; that is, when graphs support spatial tasks and when tables support symbolic tasks; (4) the processes or strategies problem solvers use are the crucial elements of cognitive fit since they provide the link between representation and task; the processes identified here are perceptual and analytical; (5) so long as there is a complete fit of representation, processes, and task type, each representation will lead to both quicker and more accurate problem solving. The theory is validated by its success in explaining the results of published studies that examine the performance of graphical and tabular representations in decision making.