Preface

Sociological Forum -     

Testing of the ‘reduction of compound alternatives’ principle

This paper reports an empirical investigation of the effects of three pictorial forms of problem representation on conformance with the Reduction of Compound Alternatives Principle of expected utility theory. The most common form of representation, written problem statements, was compared with three pictorial representations: tubes containing one hundred labeled balls, decision matrices with each column proportional in size to the probability of the corresponding event, and bar graphs. The tubes representation led to fewer violations of the Principle. In addition, when subjects were trained to construct proportional matrices from written problem statements, they exhibited fewer violations than those who received the same problems already formatted in proportional matrices. The results reported here should contribute to the development of a theory of the way people frame decision problems.     

Effects of Outcome and Probabilistic Ambiguity on Managerial Choices

Information ambiguity is prevalent in organizations and likely influences management decisions. This study examines, given imprecise probabilities and outcomes, how managers make choices when they are provided with single-figure benchmarks. Seventy-nine MBA students completed two experiments. We found that, in a decision framed as a decision under certainty involving an ambiguous outcome, the majority of the subjects were ambiguity prone in the loss condition and switched to ambiguity aversion in the gain condition. However, in the presence of probabilistic ambiguity in a decision under risk, this expected switching pattern was shown only when the difference in riskiness between the two choice options (in the loss condition) was perceived to be relatively small. In a companion study, we used a written protocol approach to identify factors that affect decision makers' investment choices when faced with ambiguous outcomes. Protocols frequently mentioned that the ambiguous outcome option was risky, even in the case which was framed as a decision under certainty in the problem statement. In a decision under risk with ambiguous outcomes, the combination of probabilistic risk and outcome ambiguity was seen as even more risky.     

The Becker-DeGroot-Marschak mechanism and generalized utility theories: Theoretical predictions and empirical observations

Karni and Safra [8] prove that the Becker-DeGroot-Marschak mechanism reveals a decision maker's true certainty equivalent of a lottery if and only if he satisfies the independence axiom. Segal [17] claims that this mechanism may reveal a violation of the reduction of compound lotteries axiom. This paper empirically tests these two interpretations. Our results show that the second interpretation fits better with the collected data. Moreover, we show by means of some nonexpected utility examples that these results are consistent with a wide range of functionals.     

An experimental evaluation of the descriptive validity of lottery-dependent utility theory

This article compares the performance of the expected utility (EU) and lottery-dependent expected utility (LDEU) models in predicting the actual choices of experimental subjects among risky options. In the process, we present two approaches for calibrating the LDEU model for an individual decision maker. The results indicate that while LDEU exhibits a higher potential for correctly predicting choice, the version of the model calibrated by indifference judgments does not outperform EU. We suggest a functional form for the parametric functions that defines the LDEU model, and discuss ways in which this function can be incorporated into choice-based assessment approaches to improve predictions.This research was supported in part by the Business Associates Fund at the Fuqua School of Business, Duke University.     

Posture Development in Infants at Heightened versus Low Risk for Autism Spectrum Disorders

Evidence suggests that children and adults diagnosed with autism spectrum disorders (ASD) exhibit difficulties with postural control. Retrospective video studies of infants later diagnosed with ASD indicate that infants who eventually receive an ASD diagnosis exhibit delays in postural development. This study investigates early posture development prospectively and longitudinally in 22 infants at heightened biological risk for ASD (HR) and 18 infants with no such risk (Low Risk; LR). Four HR infants received an autism diagnosis (AD infants) at 36 months. Infants were videotaped at home at 6, 9, 12, and 14 months during everyday activities and play. All infant postures were coded and classified as to whether or not they were infant‐initiated. Relative to LR infants, HR infants were slower to develop skill in sitting and standing postures. AD infants exhibited substantial delays in the emergence of more advanced postures and initiated fewer posture changes. Because posture advances create opportunities for infants to interact with objects and people in new and progressively more sophisticated ways, postural delays may have cascading effects on opportunities for infant exploration and learning. These effects may be greater for infants with ASD, for whom posture delays are more significant.     

Preface

Sociological Forum -     

The politic,philosophy and practice of OR—A personal view of the issues

It is almost 50 years since Sir Henry Tizzard created the group of scientists in RAF Fighter Command who were to coin the term ‘Operational Research’. The group still exists, though its work, and the work of other defence OR groups, has changed from solving acute operational problems by the extrapolation of observed data, to an attempt at predicting the outcome of policy choices that are beyond experience. Inevitably this has forced OR further into a political arena. Yet most OR practitioners are scientists used to investigating apolitical and benign nature. In this paper the author gives a personal view of what he believes OR is trying to achieve, what practical problems and pressures have to be faced and attempts to give guidance on how to proceed.