Universität zu Köln

Achtziger, Anja and Alos-Ferrer, Carlos (2014). Fast or Rational? A Response-Times Study of Bayesian Updating. Manage. Sci., 60 (4). S. 923 - 939. CATONSVILLE: INFORMS. ISSN 1526-5501

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Abstract

We present a simple model for decision making under uncertainty building on dual-process theories from psychology, and use it to illustrate a possible component of intuitive decision making of particular relevance for managerial settings. Decisions are the result of the interaction between two decision processes. The first one captures optimization based on Bayesian updating of beliefs. The second corresponds to a form of reinforcement learning capturing the tendency to rely on past performance. The model predicts that (i) in the case of conflict between the two processes, correct responses are associated with longer response times, but (ii) if both processes are aligned, errors are slower. Furthermore, (iii) response times in the case of conflict are longer than in the case of alignment. We confirm the predictions of the model in an experiment using a paradigm where an associative win-stay, lose-shift process conflicted with rational belief updating.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Achtziger, Anja UNSPECIFIED UNSPECIFIED UNSPECIFIED Alos-Ferrer, Carlos UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-441453
DOI:	10.1287/mnsc.2013.1793
Journal or Publication Title:	Manage. Sci.
Volume:	60
Number:	4
Page Range:	S. 923 - 939
Date:	2014
Publisher:	INFORMS
Place of Publication:	CATONSVILLE
ISSN:	1526-5501
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language AFFECTIVE PSYCHOLOGY; REINFORCEMENT; JUDGMENT; MODELS; PROBABILITY; INCENTIVES; COMPLEXITY; DECISIONS; DOPAMINE; CHOICE Multiple languages Management; Operations Research & Management Science Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/44145