Robin Hogarth

Robin Hogarth
University Pompeu Fabra | UPF · Department of Economy and Business

About

189
Publications
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Introduction
Skills and Expertise

Publications

Publications (189)
Chapter
The Experience Sampling Method (ESM) allows the examination of ongoing thoughts, feelings and actions as they occur in the course of everyday life. A prime benefit is that it captures events in their natural context, thereby complementing information obtained by more traditional techniques. We used ESM to study time and mood at work. Our data were...
Article
Experience and description are powerful ways of learning and adaptation. Recently, evidence has shown that these can imply systematically distinct cognitions and behaviors. However, there has been little integrative conceptual work. Drawing on different lines of research, we characterize experience and description, sketch the factors that influence...
Article
Our society venerates experience. It feels right to trust our own experience and that of others. But experience also has adverse effects. Much learning is tacit in nature and, because people are typically unaware and uncritical of the conditions in which this takes place, experience can lead to false beliefs and subsequent actions can reinforce bia...
Technical Report
Full-text available
This document provides the specifications for the application of the United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC-2009) incorporating Specifications for its application to geothermal resources. The intended use of this document is in conjunction with UNFC-2009 and the Specifications for the...
Chapter
This chapter explores the assessment of decision quality. It sketches a conceptual framework and suggests areas of research that could expand the thinking about the desirable qualities of good decisions. To assess which decision alternative is best, it proposes two dimensions of quality: procedural and ecological. Procedural quality centers on the...
Article
Inference involves two settings: In the first, information is acquired (learning); in the second, it is applied (predictions or choices). Kind learning environments involve close matches between the informational elements in the two settings and are a necessary condition for accurate inferences. Wicked learning environments involve mismatches. This...
Article
We test people's ability to learn to estimate a criterion (probability of success in a competition scenario) that requires aggregating information in a nonlinear manner. The learning environments faced by experimental participants are kind in that they are characterized by immediate, accurate feedback involving either naturalistic outcomes (informa...
Article
It is unclear whether decision makers who receive forecasts expressed as probability distributions over outcomes understand the implications of this form of communication. We suggest a solution based on the fact that people are effective at estimating the frequency of data accurately in environments that are characterized by plentiful, unbiased fee...
Article
In providing a “golden rule” for forecasting, Armstrong, Green, and Graefe (this issue) raise aspirations that reliable forecasting is possible. They advocate a conservative approach that mainly involves extrapolating from the present. We comment on three issues that relate to their proposed Golden Rule: its scope of application, the importance of...
Article
We investigate the impact of various audit schemes on the provision of public goods, when contributing less than the average of the other group members is centrally sanctioned and the probability of an audit is unknown. We study how individuals update their beliefs about the probability of being audited, both before and after audits are permanently...
Article
When the assignment of incentives is uncertain, we study how the regularity and frequency of rewards and risk attitudes influence participation and effort. We contrast three incentive schemes in a real-effort experiment in which individuals decide when to quit: a continuous incentive scheme and two intermittent ones, fixed and random. In all treatm...
Article
Full-text available
Providing information for decision making should be like telling a story. You need to know, first, what you want to say; second, whom you are addressing; and third, how to match the message and audience. However, data presentations frequently fail to follow these simple principles. To illustrate, we focus on presentations of probabilistic informati...
Article
Newell & Shanks (N&S) provide a welcome examination of many claims about unconscious influences on decision making. I emphasize two issues that they do not consider fully: the roles of automatic processes and emotions. I further raise an important conceptual problem in assigning causes to potential unconscious influences. Which "causal field" is re...
Article
We investigate the impact of various audit schemes on the future provision of public goods, when contributing less than the average of the group is sanctioned exogenously and the probability of an audit is unknown. We study how individuals update their beliefs about the probability of being audited, both before and after audits are definitely withd...
Article
CEO remuneration is contentious and so we applaud Jacquart and Armstrong’s (2013) systematic evidence-based review. We augment their analysis in two ways. First, we highlight the lack of demonstrated validity of “unaided expert judgment” to set CEO remuneration by pointing out that the settings in which such judgments are made do not facilitate lea...
Article
The outcomes in many competitive tasks depend upon both skill and luck. Behavioral theories on risk taking in tournaments indicate that low‐skilled individuals may have incentives to take more risks than high‐skilled ones. We build on these theories and suggest, in addition, that when luck is more important in determining outcomes, the increase in...
Article
Additive integration of information is ubiquitous in judgment and has been shown to be effective even when multiplicative rules of probability theory are prescribed. We explore the generality of these findings in the context of estimating probabilities of success in contests. We first define a normative model of these probabilities that takes accou...
Article
We investigate the impact of various audit schemes on the provision of public goods, when contributing less than the average of the other group members is centrally sanctioned and the probability of an audit is unknown. We study how individuals update their beliefs about the probability of being audited, both before and after audits are permanently...
Article
Does the manner in which results are presented in empirical studies affect perceptions of the predictability of the outcomes? Noting the predominant role of linear regression analysis in empirical economics, we asked 257 academic economists to make probabilistic inferences given different presentations of the outputs of this statistical tool. Quest...
Article
Full-text available
Whereas much literature exists on ``choice overload'', less is known about effects of numbers of alternatives in donation decisions. We hypothesize that donations increase with the number of recipients, albeit at a decreasing rate, and reflect donors' knowledge of the recipients. Donations involve different concepts of fairness---equity and equalit...
Article
Recently, researchers have investigated differences in decision making based on description and experience. We address the issue of when experience-based judgments of probability are more accurate than are those based on description. If description is well understood ("transparent") and experience is misleading ("wicked"), it is preferable to exper...
Article
Although research has documented the importance of emotion in risk perception, little is known about it in the context of everyday life. Using the Experience Sampling Method (ESM), 94 part-time students were prompted at random—via cellular telephones— to report on mood state and three emotions and to assess risk on thirty occasions during their wor...
Article
Full-text available
The field of forecasting has improved significantly in recent years but we need to learn from history about what we can and cannot predict, and develop plans that are sensitive to surprises. Unfortunately, there are many things we cannot predict and uncertainty is much greater than most of us are willing to accept. This article aims at helping mana...
Article
Full-text available
The experimental market entry paradigm has been used to illuminate the role of self-assessed skill in risk taking. Specifically, success only accompanies entry if a participant is one of the better ranked entrants on the skill criterion. We investigate what happens when participants face an additional source of uncertainty that perturbs relative sk...
Article
Full-text available
Intuition represents an enormous challenge for research on decision making. What is intuition? How does it modify our appreciation of cognitive abilities? When should people trust intuition? These questions set the agenda for this article, which (a) defines intuition, (b) comments on how intuition has been viewed across time in the decision making...
Article
Full-text available
We investigate whether the gender composition of teams affect their economic performance. We study a large business game, played in groups of three, where each group takes the role of a general manager. There are two parallel competitions, one involving undergraduates and the other involving MBAs. Our analysis shows that teams formed by three women...
Article
We study the risk-taking behavior of stock analysts under varying market conditions. We examine how the risk analysts take by providing bold forecasts that deviate from consensus depends on the degree of uncertainty in the environment as well as the analysts’ skill level. We provide evidence that low-skill analysts become significantly bolder, henc...
Article
Full-text available
Whereas economists have made extensive studies of the impact of levels of incentives on behavior, they have paid little attention to the effects of regularity and frequency of incentives. We contrasted three ways of rewarding participants in a real-effort experiment in which individuals had to decide when to exit the situation : a continuous reinfo...
Article
We study the gender gap in a competitive environment by exploiting the “naturalistic experiment” of a TV game show with self-selected participants and no gender-specific constraints nor discrimination. Games consist of multiple rounds where contestants answer general knowledge questions privately. One participant is eliminated or leaves voluntarily...
Article
Full-text available
Much of empirical economics involves regression analysis. However, does the presentation of results affect economists� ability to make inferences for decision making purposes? In a survey, 257 academic economists were asked to make probabilistic inferences on the basis of the outputs of a regression analysis presented in a standard format. Question...
Article
Full-text available
Whereas much literature has documented difficulties in making probabilistic inferences, it has also emphasized the importance of task characteristics in determining judgmental accuracy. Noting that people exhibit remarkable efficiency in encoding frequency information sequentially, we construct tasks that exploit this ability by requiring people to...
Article
Full-text available
Determining what influences mood is important for theories of emotion and research on subjective well-being. We consider three sets of factors: activities in which people are engaged; individual differences; and incidental variables that capture when mood is measured, e.g., time-of-day. These three factors were investigated simultaneously in a stud...
Article
Studies have found that people are overconfident in estimation involving difficult tasks but underconfident in easy tasks. Conversely, they are overconfident in placing themselves in easy tasks but underconfident in hard tasks. These findings can be explained by a regression hypothesis that implies random errors in estimation as well as by rational...
Article
Forecasts are crucial for practically all economic and business decisions. However, there is a mounting body of empirical evidence showing that accurate forecasting in the economic and business world is usually not possible. In addition, there is huge uncertainty, as practically all economic and business activities are subject to events we are unab...
Article
We use a Colombian TV game show to test gender differences in competitive behavior where there is no opportunity for discrimination and females face no genderspecific external constraints. Each game started with six contestants who had to answer general knowledge questions in private. There were five rounds of questions and, at the end of each, one...
Article
People are typically thought to be better off with more choices, yet often prefer to choose from few alternatives. By considering the perceived benefits and costs of choice, it is proposed that satisfaction from choice is an inverted U-shaped function of the number of alternatives. This proposition is verified experimentally. It is further hypothes...
Article
Excess entry – or the high failure rate of market-entry decisions – is often attributed to overconfidence exhibited by entreprene urs. We show analytically that whereas excess entry is an inevitable consequence of imperfect assessments of entrepreneurial skill, it does not imply overconfidence. Judgmental fallibility leads to excess entry even when...
Article
Illusory correlation refers to the use of information in decisions that is uncorrelated with the relevant criterion. We document illusory correlation in CEO compensation decisions by demonstrating that information, that is uncorrelated with corporate performance, is related to CEO compensation. We use publicly available data from the USA for the ye...
Article
In most naturally occurring situations, success depends on both skill and chance. We compare experimental market entry decisions where payoffs depend on skill alone and combinations of skill and luck. We find more risk taking with skill and luck as opposed to skill alone, particularly for males, and little overconfidence. Our data support an explan...
Article
Full-text available
We study the effectiveness of simple heuristics in multiattribute decision making. We consider the case of an additive separable utility function with nonnegative, nonincreasing attribute weights. In this case, cumulative dominance ensures that the so-called cumulative dominance compliant heuristics will choose a best alternative. For the case of b...
Article
Full-text available
Reports an error in "Determinants of linear judgment: A meta-analysis of lens model studies" by Natalia Karelaia and Robin M. Hogarth (Psychological Bulletin, 2008[May], Vol 134[3], 404-426). In this article, two columns of data were inadvertently transposed and thus listed under their incorrect column headers. The correct version is presented in t...
Article
Full-text available
The mathematical representation of E. Brunswik's (1952) lens model has been used extensively to study human judgment and provides a unique opportunity to conduct a meta-analysis of studies that covers roughly 5 decades. Specifically, the authors analyzed statistics of the "lens model equation" (L. R. Tucker, 1964) associated with 249 different task...
Article
Full-text available
In most naturally occurring situations, success depends on both skill and chance. We contrast experimental market entry decisions where payoffs depend on skill as opposed to combinations of skill and chance. Our data show differential attitudes toward chance by those whose self-assessed skills are low and high. Making chance more important induces...
Article
Full-text available
Much research has highlighted incoherent implications of judgmental heuristics, yet other findings have demonstrated high correspondence between predictions and outcomes. At the same time, judgment has been well modeled in the form of as if linear models. Accepting the probabilistic nature of the environment, the authors use statistical tools to mo...
Article
The mathematical representation of Brunswik’s lens model has been used extensively to study human judgment and provides a unique opportunity to conduct a meta-analysis of studies that covers roughly five decades. Specifically, we analyze statistics of the “lens model equation” (Tucker, 1964) associated with 259 different task environments obtained...
Article
The experiential sampling method (ESM) was used to collect data from 74 parttime students who described and assessed the risks involved in their current activities when interrupted at random moments by text messages. The major categories of perceived risk were short-term in nature and involved “loss of time or materials” related to work and “physic...
Chapter
Many people consider thatWard Edwards’ 1954 review paper marks the beginning of behavioral decision making or the study of how people make decisions. Fifty years after Edwards’ paper, it is illuminating to reflect on the progress of the field over the last five decades and to ask what the next fifty years might have in store. To do this, I identify...
Chapter
The effectiveness of decision rules depends on characteristics of both rules and environments. A theoretical analysis of environments specifies the relative predictive accuracies of the “take-the-best” heuristic (TTB) and other simple strategies for choices between two outcomes based on binary cues. We identify three factors: how cues are weighted;...
Article
Full-text available
The effectiveness of decision rules depends on characteristics of both rules and environments. A theoretical analysis of environments specifies the relative predictive accuracies of the “take-the-best” heuristic (TTB) and other simple strategies for choices between two outcomes based on binary cues. We identify three factors: how cues are weighted;...
Article
Research on judgment and decision making presents a confusing picture of human abilities. For example, much research has emphasized the dysfunctional aspects of judgmental heuristics, and yet, other findings suggest that these can be highly effective. A further line of research has modeled judgment as resulting from “as if” linear models. This pape...
Article
It is well accepted that people resist evidence that contradicts their beliefs. Moreover, despite their training, many scientists reject results that are inconsistent with their theories. This phenomenon is discussed in relation to the field of judgment and decision making by describing four case studies. These concern findings that “clinical” judg...
Article
Several factors affect attitudes toward ambiguity. What happens, however, when people are asked to exchange an ambiguous alternative in their possession for an unambiguous one? We present three experiments in which individuals preferred to retain the former. This status quo bias emerged both within- and between-subjects, with and without incentives...
Article
The effectiveness of decision rules depends on characteristics of both rules and environments. A theoretical analysis of environments specifies the relative predictive accuracies of the “take-the-bestâ€\x9D heuristic (TTB) and other simple strategies for choices between two outcomes based on binary cues. We identify three factors: how cues are we...
Article
Full-text available
Given the difficulties people experience in making trade-offs, what are the consequences of using simple models that avoid trade-offs? We examine choices by such models in environments where "true" preferences are linear and attributes are characterized by binary attributes. A deterministic elimination-by-aspects (DEBA) model is highly effective ov...
Technical Report
Several studies have reported high performance of simple decision heuristics inmulti-attribute decision making. In this paper, we focus on situations where attributes are binary and analyze the performance of Deterministic-Elimination-By-Aspects (DEBA) and similar decision heuristics. We consider non-increasing weights and two probabilistic models...
Article
The demands of 'representative design' set a high methodological standard. Both experimental participants and the situations with which they are faced should be representative of the populations to which researchers claim to generalize results. Failure to observe the latter has led to notable experimental failures in psychology from which economics...
Article
An important problem faced by boundedly rational agents is to identify regions of rationality, i.e., the areas for which simple, boundedly rational models are and are not effective. To map the contours of such regions, we derive probabilities that models identify the best of m alternatives (m > 2) characterized by k attributes (k > 1). The models i...
Article
When can a single variable be more accurate in binary choice than multiple sources of information? We derive analytically the probability that a single variable (SV) will correctly predict one of two choices when both criterion and predictor are continuous variables. We further provide analogous derivations for multiple regression (MR) and equal we...
Article
Full-text available
Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...
Article
Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...
Article
Whereas people are typically thought to be better off with more choices, studies show that they often prefer to choose from small as opposed to large sets of alternatives. We propose that satisfaction from choice is an inverted U-shaped function of the number of alternatives. This proposition is derived theoretically by considering the benefits and...
Article
Does ethical differentiation of products affect market behavior? We examined this issue in triopolistic experimental markets where producers set prices. One producer's costs were higher than the others. In two treatments, the additional costs were attributed to compliance with ethical guidelines. In the third, no justification was provided. Many co...
Article
Excess entry refers to the high failure rate of new entrepreneurial ventures. Economic explanations suggest 'hit and run' entrants and risk-seeking behavior. A psychological explanation is that people (entrepreneurs) are overconfident in their abilities (Camerer & Lovallo, 1999). Characterizing entry decisions as ambiguous gambles, we alternatively...
Article
Full-text available
Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...
Article
Full-text available
Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...
Article
Confidence in decision making is an important dimension of managerial behavior. However, what is the relation between confidence, on the one hand, and the fact of receiving or expecting to receive feedback on decisions taken, on the other hand? To explore this and related issues in the context of everyday decision making, use was made of the ESM (E...
Article
The effectiveness of decision rules depends on characteristics of both rules and environments. A theoretical analysis of environments specifies the relative predictive accuracies of the lexicographic rule 'take-the-best' (TTB) and other simple strategies for binary choice. We identify three factors: how the environment weights variables; characteri...
Article
People can make judgments and choices in two modes - the tacit (or intuitive) and deliberate (or analytic). This chapter examines the conditions under which each system is likely to be more effective. Distinctions are made between types of information typically used as well as the characteristics of environments that affect learning. Experiments th...
Article
Full-text available
This paper reviews the state of the art of research on individual decision-making in high-stakes, low-probability settings. A central theme is that resolving high-stakes decisions optimally poses a formidable challenge not only to nave decision makers, but also to users of more sophisticated tools, such as decision analysis. Such decisions are diff...
Article
This chapter, originally written as a consequence of the terrorist attacks of September 11, 2001, provides an elementary, everyday introduction to the concepts of risk and insurance. Conceptually, risk has two dimensions: a potential loss, and the chance of that loss being realized. People can, however, transfer risk to insurance companies against...
Article
In conducting experiments, economists take more care than psychologists in specifying characteristics of people and tasks and are clearer about the conditions to which results can be generalized. Psychologists could learn much from this practice. They should also think in terms of programs of research – involving laboratory and field studies – that...
Article
Full-text available
this paper we summarize the results of 74 studies comparing behavior of experimental subjects who were paid zero, low or high financial performance-based incentives. The studies show that the effects of incentives are mixed and complicated. The extreme positions, that incentives make no difference at all, or always eliminate persistent irrationalit...
Article
Accumulating empirical evidence on American managers shows that social-capital effects on performance are a function of the information and control benefits of bridging structural holes--the disconnections between nonredundant contacts in a network. Is that network form of social capital unique to Americans? France seemed to us a productive site fo...