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Daniel G. Goldstein

Daniel G. Goldstein
Microsoft Research, New York City · Computational Social Science

Ph.D.

About

109
Publications
171,740
Reads
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22,403
Citations
Introduction
Principal Research at Microsoft Research; Fellow at London Business School
Additional affiliations
March 2012 - March 2016
Microsoft
Position
  • Principal Investigator
January 2005 - present
London Business School
September 2002 - August 2005
Columbia University
Education
September 1992 - March 1997
University of Chicago
Field of study
  • Psychology
September 1988 - March 2003
University of Wisconsin–Madison
Field of study
  • Computer Science

Publications

Publications (109)
Article
Full-text available
Significance Informal political discussions with peers can increase trust in democracy and improve understanding of self and others. However, these benefits do not often materialize because people tend to shy away from political discussions and because friendship networks rarely expose highly divergent political views. In a large-scale experiment,...
Article
In recent years, researchers in several scientific disciplines have become concerned with published studies replicating less often than expected. A positive side effect of this concern is an appreciation that replicating other researchers’ work is an essential part of the scientific process. To date, many such efforts have come from the experimenta...
Article
Full-text available
Judges, doctors and managers are among those decision makers who must often choose a course of action under limited time, with limited knowledge and without the aid of a computer. Because data‐driven methods typically outperform unaided judgements, resource‐constrained practitioners can benefit from simple, statistically derived rules that can be a...
Article
In the classical secretary problem, one attempts to find the maximum of an unknown and unlearnable distribution through sequential search. In many real-world searches, however, distributions are not entirely unknown and can be learned through experience. To investigate learning in such settings, we conduct a large-scale behavioral experiment in whi...
Conference Paper
Laypeople are frequently exposed to unfamiliar numbers published by journalists, social media users, and algorithms. These figures can be difficult for readers to comprehend, especially when they are extreme in magnitude or contain unfamiliar units. Prior work has shown that adding "perspective sentences" that employ ratios, ranks, and unit changes...
Article
Full-text available
Despite a growing body of research focused on creating interpretable machine learning methods, there have been few empirical studies verifying whether interpretable methods achieve their intended effects on end users. We present a framework for assessing the effects of model interpretability on users via pre-registered experiments in which particip...
Article
Full-text available
Decision research has experienced a shift from simple algebraic theories of choice to an appreciation of mental processes underlying choice. A variety of process-tracing methods has helped researchers test these process explanations. Here, we provide a survey of these methods, including specific examples for subject reports, movement-based measures...
Article
In the classical secretary problem, one attempts to find the maximum of an unknown and unlearnable distribution through sequential search. In many real-world searches, however, distributions are not entirely unknown and can be learned through experience. To investigate learning in such a repeated secretary problem we conduct a large-scale behaviora...
Conference Paper
In the classical secretary problem, one attempts to find the maximum of an unknown and unlearnable distribution through sequential search. In many real-world searches, however, distributions are not entirely unknown and can be learned through experience. To investigate learning in such a repeated secretary problem we conduct a large-scale behaviora...
Conference Paper
Full-text available
Having a crowd estimate a numeric value is the original inspiration for the notion of "the wisdom of the crowd." Quality control for such estimated values is challenging because prior, consensus-based approaches for quality control in labeling tasks are not applicable in estimation tasks. We present VoxPL, a high-level programming framework that au...
Article
From doctors diagnosing patients to judges setting bail, experts often base their decisions on experience and intuition rather than on statistical models. While understandable, relying on intuition over models has often been found to result in inferior outcomes. Here we present a new method, select-regress-and-round, for constructing simple rules t...
Preprint
From doctors diagnosing patients to judges setting bail, experts often base their decisions on experience and intuition rather than on statistical models. While understandable, relying on intuition over models has often been found to result in inferior outcomes. Here we present a new method, select-regress-and-round, for constructing simple rules t...
Article
Full-text available
We investigate whether beliefs about the income distribution are associated with political positions for or against redistribution. Using a novel elicitation method, we assess individuals’ beliefs about the shape of the income distribution in the United States. We find that beliefs about inequality, measured in terms of income dispersion, play only...
Conference Paper
Full-text available
How many guns are there in the USA? What is the incidence of breast cancer? Is a billion dollar budget cut large or small? Advocates of scientific and civic literacy are concerned with improving how people estimate and comprehend risks, measurements, and frequencies, but relatively little progress has been made in this direction. In this article we...
Article
Full-text available
Some online display advertisements are annoying. Although publishers know the payment they receive to run annoying ads, little is known about the cost that such ads incur (e.g., causing website abandonment). Across three empirical studies, the authors address two primary questions: (1) What is the economic cost of annoying ads to publishers? and (2...
Article
Full-text available
We review research on revenue models used by online firms who offer digital goods. Such goods are non-rival, have near zero marginal cost of production and distribution, low marginal cost of consumer search, and low transaction costs. Additionally, firms can easily observe and measure consumer behavior. We start by asking what consumers can offer i...
Article
Full-text available
The "wisdom of crowds" refers to the phenomenon that aggregated predictions from a large group of people can rival or even beat the accuracy of experts. In domains with substantial stochastic elements, such as stock picking, crowd strategies (e.g. indexing) are difficult to beat. However, in domains in which some crowd members have demonstrably mor...
Article
Full-text available
With the availability of social network data, it has become possible to relate the behavior of individuals to that of their acquaintances on a large scale. Although the similarity of connected individuals is well established, it is unclear whether behavioral predictions based on social data are more accurate than those arising from current marketin...
Article
Research on choice architecture is now shaping policy around the world, touching on areas ranging from retirement economics to environmental issues. Recently, researchers and policy makers have started to pay more attention not just to choice architecture but also to information architecture: the format in which information is presented to people....
Article
Full-text available
How accurate are laypeople's intuitions about probability distributions of events? The economic and psychological literatures provide opposing answers. A classical economic view assumes that ordinary decision makers consult perfect expectations, while recent psychological research has emphasized biases in perceptions. In this work, we test laypeopl...
Article
Full-text available
Defaults have such powerful and pervasive effects on consumer behavior that they could be considered "hidden persuaders" in some settings. Ignoring defaults is not a sound option for marketers or consumer policy makers. The authors identify three theoretical causes of default effects-implied endorsement, cognitive biases, and effort-to guide though...
Article
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The canonical design of customer satisfaction surveys asks for global satisfaction with a product or service and for evaluations of its distinct attributes. Users of these surveys are often interested in the relationship between global satisfaction and ...
Conference Paper
Full-text available
Display advertisements vary in the extent to which they an- noy users. While publishers know the payment they receive to run annoying ads, little is known about the cost such ads incur due to user abandonment. We conducted a two- experiment investigation to analyze ad features that relate to annoyingness and to put a monetary value on the cost of a...
Conference Paper
Display advertisements vary in the extent to which they annoy users. While publishers know the payment they receive to run annoying ads, little is known about the cost such ads incur due to user abandonment. We conducted a two-experiment investigation to analyze ad features that relate to annoyingness and to put a monetary value on the cost of anno...
Article
In this paper we propose the use of preferred outcome distributions as a new method to elicit individuals' value and probability weighting functions in decisions under risk. Extant approaches for the elicitation of these two key ingredients of individuals' risk attitude typically rely on a long, chained sequence of lottery choices. In contrast, pre...
Technical Report
Full-text available
Recent research suggests that advice and communication about investment risks can be improved by use of the Distribution Builder (Goldstein, Johnson, and Sharpe 2008). Essentially, this is an interactive tool that allows consumers to engage in a hypothetical investment task and to experience risk-return tradeoffs. The objective of this paper is to...
Article
We review research on revenue models used by online firms who offer digital goods. Such goods are nonrival, have near zero marginal cost of production and distribution, low marginal cost of consumer search and low transaction costs. Additionally, firms can easily observe and measure consumer behavior. We start by asking what consumers can offer in...
Article
The article discusses how should policy-makers choose defaults regarding organ donors. First, consider that every policy must have a no-action default, and defaults impose physical, cognitive, and, in the case of donation, emotional costs on those who must change their status. Second, note that defaults can lead to two kinds of misclassification, w...
Conference Paper
Full-text available
Display advertisements are typically sold by the impression, where one impression is simply one download of an ad. Previous work has shown that the longer an ad is in view, the more likely a user is to remember it and that there are diminishing returns to increased exposure time [Goldstein et al. 2011]. Since a pricing scheme that is at least parti...
Conference Paper
Full-text available
Models of networked diffusion that are motivated by analogy with the spread of infectious disease have been applied to a wide range of social and economic adoption processes, including those related to new products, ideas, norms and behaviors. However, it is unknown how accurately these models account for the empirical structure of diffusion over n...
Article
Full-text available
The way a choice is presented influences what a decision-maker chooses. This paper outlines the tools available to choice architects, that is anyone who present people with choices. We divide these tools into two categories: those used in structuring the choice task and those used in describing the choice options. Tools for structuring the choice t...
Chapter
"More information is always better, and full information is best. More computation is always better, and optimization is best." More-is-better ideals such as these have long shaped our vision of rationality. Yet humans and other animals typically rely on simple heuristics to solve adaptive problems, focusing on one or a few important cues and ignor...
Chapter
Economic models of benefit-cost analysis assume decision makers choose so as to maximize net benefits given stable internal preferences. This chapter explores four cases where the interaction between institutional structure and non-optimizing human decision processes does a better job explaining choice. These cases emphasize the central role instit...
Article
Full-text available
The way a choice is presented influences what a decision-maker chooses. This paper outlines the tools available to choice architects, that is anyone who present people with choices. We divide these too ls into two categories: those used in structuring the choice task and those used in describing the choice options. Tools for structuring the choice...
Article
Full-text available
Reports an error in "Partitioning default effects: Why people choose not to choose" by Isaac Dinner, Eric J. Johnson, Daniel G. Goldstein and Kaiya Liu (Journal of Experimental Psychology: Applied, Advanced Online Publication, Jun 27, 2011, np). The article contained an incorrect Figure 4. Additionally, the article was missing keywords. All version...
Article
Many firms use product configurators to enable customers to specify their desired products online. In such systems, defaults are pre-specified for levels of product features by the manufacturer or dealer. For example, when configuring a racing bike online, a default is predefined (e.g., the Shimano Ultegra model) for all required features (e.g., th...
Article
Full-text available
Many people fail to save what they need to for retirement (Munnell, Webb, and Golub-Sass 2009). Research on excessive discounting of the future suggests that removing the lure of immediate rewards by pre-committing to decisions, or elaborating the value of future rewards can both make decisions more future-oriented. In this article, we explore a th...
Article
Where the problem is not expert underestimation of randomness, but more: the tools themselves used in regression analyses and similar methods underestimate fat tails, hence the randomness in the data. We should avoid imparting psychological explanations to errors in the use of statistical methods.
Article
Full-text available
The recognition heuristic is a prime example of how, by exploiting a match between mind and environment, a simple mental strategy can lead to efficient decision making. The proposal of the heuristic initiated a debate about the processes underlying the use of recognition in decision making. We review research addressing four key aspects of the reco...
Article
Full-text available
The advantage of models that do not use flexible parameters is that one can precisely show to what degree they predict behavior, and in what situations. In three issues of this journal, the recognition heuristic has been examined carefully from many points of view. We comment here on four themes, the use of optimization models to understand the rat...
Article
Full-text available
Default options exert an influence in areas as varied as retirement program design, organ donation policy, and consumer choice. Past research has offered potential reasons why no-action defaults matter: (a) effort, (b) implied endorsement, and (c) reference dependence. The first two of these explanations have been experimentally demonstrated, but t...
Conference Paper
Full-text available
Display advertising is a multi-billion dollar industry that has traditionally used a pricing scheme based on the number of impressions delivered. The number of impressions of an ad is simply the number of downloads of that ad. One impression, however, does not dierentiate between an ad that is in view for ve seconds or ve minutes. Since advertisers...
Article
Full-text available
The recognition heuristic exploits the basic psychological capacity for recognition in order to make inferences about unknown quantities in the world. In this article, we review and clarify issues that emerged from our initial work (Goldstein and Gigerenzer, 1999, 2002), including the distinction between a recognition and an evaluation process. The...
Article
Full-text available
The recognition heuristic exploits the basic psychological capacity for recognition in order to make inferences about unknown quantities in the world. In this article, we review and clarify issues that emerged from our initial work (Goldstein & Gigerenzer, 1999, 2002), including the distinction between a recognition and an evaluation process. There...
Conference Paper
Full-text available
The efficient functioning of markets and institutions assume a certain degree of honesty from participants. In labor markets, for instance, employers benefit from employees who will render meaningful work, and employees benefit from employers who will pay the promised amount for services rendered. We use an established method for detecting dishones...
Article
Full-text available
The recognition heuristic is a noncompensatory strategy for inferring which of two alternatives, one recognized and the other not, scores higher on a criterion. According to it, such inferences are based solely on recognition. We generalize this heuristic to tasks with multiple alternatives, proposing a model of how people identify the consideratio...
Article
Making big decisions is a daily task for business executives. Dan Goldstein asks if you have given much thought to how those decisions are made. It may be that the way you or your company reach decisions is both time-consuming and wide of the mark when it should be fast and frugal.
Article
Simple statistical forecasting rules, which are usually simplifications of classical models, have been shown to make better predictions than more complex rules, especially when the future values of a criterion are highly uncertain. In this article, we provide evidence that some of the fast and frugal heuristics that people use intuitively are able...
Article
Full-text available
Black Swan events are almost impossible to predict. Instead of perpetuating the illusion that we can anticipate the future, risk management should try to reduce the impact of the threats we don't understand.
Article
Most consumers don't think about the potential range of choices in a sales transaction; thus, they often accept the pre-selected “default” choice. Companies can benefit immensely from well-designed defaults, though, and Daniel Goldstein tells us how.
Article
Defaults have such powerful, pervasive and unrecognized effects on consumer behavior that in some settings they may be considered 'hidden persuaders'. Looking at defaults from the perspective of consumer welfare, consumer autonomy and marketing ethics, this paper shows that ignoring defaults is not an option. It identifies three theoretical causes...
Article
Full-text available
The recognition heuristic is a simple mnemonic decision strategy. In a comparison between two alternatives, one recognized and the other not, it bets that the recognized alternative is likely to score a higher value on a given criterion of interest. Yet, this heuristic is not applicable when both alternatives are recognized. We investigate a recogn...
Article
“One-reason decision making” is a label for a class of fast and frugal heuristics that base decisions on only one reason. These heuristics do not attempt to optimally fit parameters to a given environment; rather, they have simple structural features and “bet” that the environment will fit them. By not attempting to optimize, these heuristics can s...
Article
Full-text available
Does it pay to pay online panel members? A three-wave longitudinal experiment was conducted with an online panel to examine whether per person payments, paid through an online intermediary, influence response and retention rates. In the payment condition, participants were promised payment for participation at each wave, whereas control participant...
Article
Full-text available
When car rental companies sign you up for insurance unless you actively decline it, or software vendors recommend you click "next" for a quick install, they're choosing default options for you - covertly or overtly guiding your choices. Well-designed defaults benefit both company and consumer, simplifying decision making, enhancing customer satisfa...
Article
Full-text available
Investing for retirement is one of the most consequential yet daunting decisions consumers face. We present a way to both aid and understand consumers as they construct preferences for retirement income. The method enables consumers to build desired probability distributions of wealth constrained by market forces and the amount invested. We collect...
Chapter
Full-text available
This source in the Handbook of Experimetal Economis describes tenets of heuristic deciaion making.
Article
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In their postscript, M. R. Dougherty, A. M. Franco-Watkins, and R. Thomas (see record 2008-00265-011) asserted that models of fast and frugal heuristics have been vaguely specified. We strongly reject this claim. The computational models of search, stopping, and decision rules allow for precise predictions. In fact, many researchers have tested un...
Article
Publisher Summary This chapter reports how stock portfolios that employed recognition heuristics fared relative to market indices, mutual funds, chance or “dartboard” portfolios, individual investment decisions, portfolios of unrecognized stocks and other benchmarks proposed by third parties.The surprising performance of recognition-based portfolio...
Article
Full-text available
M. R. Dougherty, A. M. Franco-Watkins, and R. Thomas (2008) conjectured that fast and frugal heuristics need an automatic frequency counter for ordering cues. In fact, only a few heuristics order cues, and these orderings can arise from evolutionary, social, or individual learning, none of which requires automatic frequency counting. The idea that...
Article
People are impatient and discount future rewards more when they are asked to delay consumption than when they are offered the chance to accelerate consumption. The three experiments reported here provide a process-level account for this asymmetry, with implications for designing decision environments that promote less impulsivity. In Experiment 1,...
Article
Full-text available
Finance professionals, despite regular exposure to notions of volatility, seem to confuse mean absolute deviation with standard deviation. In some fat tailed markets, theoretical Gaussian variables can be underestimated by as much as 90%. It is not a lack of statistical knowledge that appears to be the impediment, but rather difficulty in translati...
Article
Full-text available
Finance professionals, who are regularly exposed to notions of volatility, seem to confuse mean absolute deviation with standard deviation, causing an underestimation of 25% with theoretical Gaussian variables. In some fat tailed markets the underestimation can be up to 90%. The mental substitution of the two measures is consequential for decision...
Article
Full-text available
Randomized experiments, conducted during the 2006 US midterm election and the 2005 German federal election, examined the impact on voter turnout of two simple treatments. The effects of a mere measurement treatment (asking people if they intend to vote) and an implementation intentions treatment (asking people how they intend to vote), were estimat...
Article
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People prefer a brand they know over one they don't-even when the familiar one is dangerous. But there are ways for unknown brands to compensate.
Chapter
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Experts in law, psychology, and economics explore the power of "fast and frugal" heuristics in the creation and implementation of law In recent decades, the economists' concept of rational choice has dominated legal reasoning. And yet, in practical terms, neither the lawbreakers the law addresses nor officers of the law behave as the hyperrational...
Article
Full-text available
Companies that sell subscription model, "all-youcan-eat," digital content a re boosting profits by carefully manipulating consumption.
Article
Consumer choice occurs over multiple products and services, each comprising multiple risks. In this paper, we present a new market research technique to measure consumers' preferences over large spaces of risks. We first describe the method, present its psychological and analytical motivation, and then report the results of empirical tests of relia...