Escaping from Bad Decisions A Behavioral Decision-Theoretic Perspective.

Front Cover
Escaping From Bad Decisions
Copyright Page
Contents
About the author
Preface
1 Introduction: Escaping from bad decisions
	1.1 The classical problem of bad decision-making and akrasia
	1.2 Second-order desires and bad decisions
	1.3 The perspective proposed in this book: avoiding bad decision-making through prescriptive heuristics based on scientific...
		1.3.1 The prescriptive approach of decision-making
		1.3.2 Comparison of the approach adopted in this book with nudging and boosting
	1.4 An overview of the contents of this book and suggestion to avoid bad decisions
		1.4.1 The idea of worst and best decisions
		1.4.2 Pluralism in decision-making
		1.4.3 Prescriptive pluralistic decision-making
	1.5 Conclusion and future perspectives
	References
2 Formal definitions of the worst decisions, best decisions, and bad decisions
	2.1 Framework to describe decision-making
		2.1.1 What is the best and bad decision?
		2.1.2 Preference relation and set theory
		2.1.3 Ordering and comparative judgment
		2.1.4 Various forms of comparative judgments
		2.1.5 Various types of preference relation
	2.2 Worst option, best option, and bad decision
		2.2.1 Definition of worst and best options
		2.2.2 Relationship between worst and best options
	2.3 Conditions for guaranteeing preference relations of the worst and best options
		2.3.1 Existence condition of worst option
		2.3.2 Existence condition of best option
		2.3.3 Relation of the worst and best options
	2.4 Necessary and sufficient conditions for the existence of worst and best options
		2.4.1 Necessary and sufficient conditions for the existence of worst option
		2.4.2 Necessary and sufficient conditions for the existence of best option
		2.4.3 Necessary and sufficient conditions for the existence of worst and best options
	2.5 Conclusion
	References
3 Rational choice, irrational choice, and bad decisions
	3.1 Economic man and rational decision-making
	3.2 Greatest element rationalizability
		3.2.1 Greatest element rationalizability and the best option
		3.2.2 Criteria of rationality and weak order
			3.2.2.1 Two criteria of rationality
			3.2.2.2 Rational choice and weak order
		3.2.3 Criteria of irrationality and weak order
			3.2.3.1 Two criteria of irrationality
			3.2.3.2 Irrational choice and weak order
		3.2.4 Criteria of rationality and irrationality
			3.2.4.1 Two criteria of rationality and irrationality
	3.3 Maximal-element rationalizability
		3.3.1 Maximal-element rational choice
			3.3.1.1 Maximal-element rationalizability and not inferior option
			3.3.1.2 Maximal option and quasiorder
			3.3.1.3 Theorem of the maximal-element rationalization
		3.3.2 Maximal-element irrationality and bad decision
			3.3.2.1 Maximal-element irrationality and not superior option
			3.3.2.2 Maximal option and quasiorder
			3.3.2.3 Theorem of the maximal-element irrational choice
		3.3.3 Maximal-element irrationality and rationality
	3.4 Conclusion
	References
4 Preference ordering and measurement
	4.1 Understanding preference relationships through ordering decisions and behavioral observations
	4.2 Aspects of ordering decisions
		4.2.1 Properties of preference relations
		4.2.2 Equivalence relation
		4.2.3 Relationship system
		4.2.4 Total order and representation theorem
		4.2.5 Weak order and representation theorem
	4.3 What is the measurement of preference relations?
		4.3.1 Correspondence and measurement
		4.3.2 On the measurement and representation of preference relation
		4.3.3 Uniqueness and measurement scale level
	4.4 Quantitative representation of possible psychophysical laws and preference relations in terms of scale levels
		4.4.1 Psychophysical laws
			4.4.1.1 Psychological scale structure of preference
		4.4.2 Representational measurement approach
	4.5 Conclusion
	References
5 Rational preference, irrational preference, and revealed preference
	5.1 Rationality criteria and revealed preference
	5.2 The concept of revealed preference
	5.3 Utility functions and indifference curves
		5.3.1 Indifference curve
		5.3.2 Perfect substitute goods
		5.3.3 Complete complementary goods
		5.3.4 Indifference curve groups for noneconomic goods
		5.3.5 Indifference curve group of neutral goods
	5.4 Revealed preference
		5.4.1 What is revealed preference?
		5.4.2 Principle of revealed preference
		5.4.3 Weak axiom of revealed preference
		5.4.4 Strong axiom of revealed preference
		5.4.5 A more general definition of rationality and revealed preference
	5.5 Irrational choice and revealed preference
	5.6 Revealed attention
	5.7 Empirical testing of acyclic preference relations
		5.7.1 Empirical investigation of acyclicity
		5.7.2 Nontransitivity and thresholds
		5.7.3 A decision-making model to explain nontransitivity
	5.8 Conclusion
	References
6 Multiattribute decision-making, multiobjective optimization, and the additive conjoint system
	6.1 Plurality of values and multiattribute decision-making
	6.2 Difficulties of multiattribute decision-making
		6.2.1 Multiattribute decision-making and information search
		6.2.2 Multiattribute decision-making, best decision, and worst decision
		6.2.3 Multiattribute decision-making and intransitivity of preference
		6.2.4 Difficulty of multiattribute decision-making and its psychological cause
	6.3 Theoretical examination when multiattribute decision-making does not satisfy weak order property of preference
		6.3.1 Preference based on the dominance principle
		6.3.2 Preference based on the principle of the maximum number of dominant attributes
		6.3.3 Impossibility theorem of multiattribute decision-making
	6.4 Multiattribute decision-making and multioptimization
		6.4.1 Multioptimization
		6.4.2 Concept of multiobjective optimization
	6.5 Additive conjoint structure and quasi best decision
		6.5.1 Making the best decision with a single attribute and utility function
		6.5.2 Multiattribute decision-making and additive conjoint structure
		6.5.3 Axiomatic properties of additive conjoint structure
	6.6 Conclusion
	References
7 A computer simulation of cognitive effort and the accuracy of two-stage decision strategies in a multiattribute decision-...
	7.1 Introduction
	7.2 Findings and problems of previous research on decision strategies
		7.2.1 Decision strategies identified
		7.2.2 Computer simulation studies of multiattribute decision-making process and problems
	7.3 Purpose and methods of computer simulation 1
		7.3.1 Purpose of computer simulation 1
		7.3.2 Method of computer simulation 1
	7.4 Results and discussion of computer simulation 1
		7.4.1 Strategies and cognitive effort in the first-stage
		7.4.2 First-stage strategies and relative accuracy
		7.4.3 Relationship between relative accuracy and cognitive effort
		7.4.4 Relationship between the number of options, cognitive effort, and relative accuracy
			7.4.4.1 Relationship between the number of choices and cognitive effort
			7.4.4.2 Relationship between the number of choices and relative accuracy
		7.4.5 Relationship between the number of attributes and cognitive effort and relative accuracy
			7.4.5.1 Relationship between the number of attributes and cognitive effort
			7.4.5.2 Relationship between the number of two attributes and relative accuracy
	7.5 Purpose and method of computer simulation 2
		7.5.1 Purpose of computer simulation 2
		7.5.2 Method of computer simulation 2
	7.6 Results and discussion of computer simulation 2
		7.6.1 Relationship between the number of options left in the second-stage and cognitive effort
		7.6.2 Relationship between the number of alternatives left in the second-stage and relative accuracy
	7.7 General discussion
	7.8 Conclusions and problems of this study
	References
8 A computer simulation of bad decisions and good decisions: an extended analysis of two-stage decision strategies
	8.1 A comparison between additive strategy (WAD) and lexicographic strategy (LEX) in multiattribute decision-making
	8.2 Methodology of this study
		8.2.1 Target decision strategy
		8.2.2 Indicators of decision-making
		8.2.3 Method of computer simulation
	8.3 Results and discussion of computer simulation
		8.3.1 Cognitive effort (elementary information processes)
		8.3.2 Choice rate of the worst option
		8.3.3 Relative accuracy defined by the difference from the minimum value and by Payne et al
		8.3.4 Relative accuracy divided by cognitive effort (an index of efficiency)
		8.3.5 Best choice rate
	8.4 General discussions
	8.5 Conclusion
	References
9 A process tracing study of decision strategies and bad decisions
	9.1 Implementation of the additive decision strategy and bad decision: a pilot study
		9.1.1 Previous research on the choice accuracy and its problem
		9.1.2 Purpose of the experiment
		9.1.3 Method
		9.1.4 Result and discussion
	9.2 How to examine the effect of a second-stage decision-making strategy using process tracking on the bad decisions
		9.2.1 Issues to be examined and the purpose of this study
		9.2.2 Method of monitoring information acquisition as a process tracking technique
		9.2.3 Overview of the experiment
		9.2.4 Methods of the experiment
			9.2.4.1 Participants in the experiment
			9.2.4.2 Experimental equipment
			9.2.4.3 Tasks and strategies used in the experiment
			9.2.4.4 Experimental stimuli
			9.2.4.5 Instruction
			9.2.4.6 Instruction of information monitoring method
			9.2.4.7 Questionnaire
	9.3 Results and discussion of the experiment
		9.3.1 Indicators used in the analysis
		9.3.2 Relationship between decision time and worst choice adoption rate
		9.3.3 Worst choice rate
			9.3.3.1 First-stage strategy
			9.3.3.2 Second-stage strategy
			9.3.3.3 Rate of the worst option choice for each strategy of a combination of the first- and second-stage strategies
		9.3.4 Correlation between decision time, worst choice adoption rate, and questionnaire
		9.3.5 Crisis rate by strategy
		9.3.6 Best choice rate for each strategy
			9.3.6.1 First-stage strategy
			9.3.6.2 Second-stage strategy
			9.3.6.3 Best choice rates of combination of first- and second-stage strategies
		9.3.7 Correlation between decision time, best option choice rate, and questionnaire
	9.4 Conclusion
	References
10 A process tracing study of bad decisions: using eye tracking in food decision-making
	10.1 The problem of risky food decision-making and the assumptions of this study
	10.2 Method of the eye-tracking experiment
		10.2.1 Participants
		10.2.2 Experimental setup
		10.2.3 Decision-making issues
		10.2.4 Experimental procedures
			10.2.4.1 Instruction
			10.2.4.2 Practice trial
			10.2.4.3 Eye-tracker setup and calibration
			10.2.4.4 Experimental trial
		10.2.5 Content of instruction
			10.2.5.1 Introductory instruction
			10.2.5.2 Practice trials
			10.2.5.3 Eye-tracking setup
			10.2.5.4 Experimental trial
	10.3 Results and discussion
		10.3.1 Choice results and decision time in the food decision-making task
		10.3.2 Results of the number of times a region was viewed for each food
		10.3.3 Relationship between questionnaire food choice scores and eye-tracking data (average number of gazes per area)
		10.3.4 Comparison of gazed behavior between worse decision and better decision
			10.3.4.1 Spinach task
			10.3.4.2 Mushroom task
			10.3.4.3 Rice task
			10.3.4.4 Beef liver task
			10.3.4.5 Lettuce task
			10.3.4.6 Water task
		10.3.5 Relationship between the eye-tracker experiment and the questionnaire experiment
	10.4 Questionnaire survey
		10.4.1 Survey participants
		10.4.2 Methodology of the questionnaire survey
			10.4.2.1 Tasks for selecting foods
			10.4.2.2 Scales for social behavior
			10.4.2.3 Evaluation of knowledge about food safety
			10.4.2.4 Knowledge confidence survey items
			10.4.2.5 Information sources to be referred
			10.4.2.6 Randomization and counterbalancing of the questionnaire
		10.4.3 Results and discussion of the questionnaire survey
			10.4.3.1 Food choice task in Question 1
			10.4.3.2 Relationship between other question items and food choice problems
	10.5 Conclusion
	References
11 Decision strategies and bad group decision-making: a group meeting experiment
	11.1 Group decision and groupthink
	11.2 Method of the experiment
		11.2.1 Overview of the experiment
		11.2.2 Participants in the experiment
		11.2.3 Procedures before conducting the experiment
			11.2.3.1 Preliminary explanation of the experiment
			11.2.3.2 Experimental practice
			11.2.3.3 Preliminary survey
		11.2.4 Experimental stimuli
			11.2.4.1 Distributed agenda forms
			11.2.4.2 Additional materials
			11.2.4.3 Procedures
		11.2.5 Questionnaire
			11.2.5.1 Items related to the results of discussions
			11.2.5.2 Evaluation items for the discussion
		11.2.6 Experimental procedures
		11.2.7 Instruction
	11.3 Results and discussion
		11.3.1 Outline of analyzing the experimental results
		11.3.2 Agreement rate between the two bad choices
		11.3.3 Tabulations of bad decisions
		11.3.4 An examination of the ease of choosing the bad option in a majority-based choice
		11.3.5 Logistic regression analysis on irrational decision-making
			11.3.5.1 Analysis of the ease of choosing a bad option
				Examination of the worst option defined by the experimental participants
			11.3.5.2 Analysis of the difference between the options chosen by the group and the options chosen by majority vote
			11.3.5.3 Multiple regression analysis of discussion evaluation
				Analysis of overall satisfaction for discussion
	11.4 Conclusion
	References
12 An observational experiment in group decision-making: Can people detect bad group decisions?
	12.1 Cognitive processes and groupthink in group decision-making
	12.2 Pilot Study 1
		12.2.1 Purpose of Pilot Study 1
		12.2.2 Overview of the experiment
		12.2.3 Making videos of a meeting scene (making experimental stimuli)
		12.2.4 Method
		12.2.5 Results
		12.2.6 Discussion
	12.3 Pilot Study 2
		12.3.1 Purpose
		12.3.2 Overview of Pilot Study 2
		12.3.3 Method of Pilot Study 2
			12.3.3.1 Participants of the experiment
			12.3.3.2 Questionnaire items
			12.3.3.3 Procedure
		12.3.4 Results
		12.3.5 Discussion
			12.3.5.1 Creation of a meeting video
			12.3.5.2 Experimental procedure
	12.4 Method of the experiment
		12.4.1 Creation of experimental stimuli for the experiment
		12.4.2 Implementation of the experiment
			12.4.2.1 General instructions
			12.4.2.2 Experimental instructions
	12.5 Result of experiment
		12.5.1 Experiment 1
			12.5.1.1 Overall results
			12.5.1.2 Correlation analysis
			12.5.1.3 Analysis of variance
		12.5.2 Experiment 2
			12.5.2.1 Overall results
			12.5.2.2 Correlation analysis
			12.5.2.3 Analysis of variance
			12.5.2.4 Interaction between control and experimental groups
	12.6 Discussion
		12.6.1 Experiment 1
		12.6.2 Experiment 2
		12.6.3 Interaction between control and experimental groups
	12.7 Conclusion
	References
13 Revisiting the group decision-making experiment
	13.1 Irrationality and bad decision-making in group decision-making
	13.2 Preliminary survey
		13.2.1 Purpose of the preliminary survey
		13.2.2 Questionnaire
		13.2.3 Implementation of the preliminary survey
		13.2.4 Results and discussion of the preliminary survey
	13.3 Method for group decision-making experiment
		13.3.1 Experimental design
		13.3.2 Stimulus creation
		13.3.3 Questionnaire
		13.3.4 Implementation of the experiment
			13.3.4.1 Participants
			13.3.4.2 Procedure
			13.3.4.3 Instruction
		13.3.6 Outline of the analysis
	13.4 Results
		13.4.1 Analysis of the desirability of a meeting decision
		13.4.2 Analysis of the desirability of the meeting process
		13.4.3 Correlation analysis
	13.5 Discussion
		13.5.1 Desirability of the meeting decision
		13.5.2 Desirability of the meeting process
		13.5.3 Correlation coefficient between desirability of decision and desirability of process in meetings
	13.6 Conclusion and future prospects
	References
14 The detection of bad decisions and a voting experiment
	14.1 Detection of bad group decision-making and groupthink
	14.2 Method of Experiment 1
		14.2.1 Outline of Experiment 1
		14.2.2 Experimental design
		14.2.3 Experimental stimuli
		14.2.4 Questionnaire
		14.2.5 Implementation of the experiment
		14.2.6 Instruction
	14.3 Results and discussion of Experiment 1
		14.3.1 Correlation analysis
		14.3.2 Analysis of the desirability of decisions in meetings
		14.3.3 Analysis of the desirability of the meeting process
		14.3.4 Analysis of the sensitivity of the consumption deadline
		14.3.5 Analysis of voting
	14.4 Method of Experiment 2
		14.4.1 Overview of the experiment
		14.4.2 Experimental design
		14.4.3 Stimuli
		14.4.4 Questionnaire
		14.4.5 Implementation of the experiment
		14.4.6 Instruction
	14.5 Results and discussion of Experiment 2
		14.5.1 Correlation analysis
		14.5.2 Analysis of the desirability of decisions
		14.5.3 Analysis of the desirability of the meeting process
		14.5.4 Analysis of consummation sensitivity
		14.5.5 Analysis of voting
	14.6 Conclusion and future prospects
	References
15 Situation dependence of group and individual decision making and bad decisions
	15.1 Decision-making strategies for individual decision-making and group decision-making by majority rule
	15.2 Consequences from Condorcet’s Jury Theorem
	15.3 Group decision-making in the situations where independence among group members is not ensured
	15.4 Experimenton situation dependence of decision-making and bad decisions
		15.4.1 Outline of the experiment
		15.4.2 Decision task
		15.4.3 Preliminary study
			15.4.3.1 Method of preliminary experiment
				Experimental participants
				Procedure
			15.4.3.2 Results and discussion
		15.4.4 Experiment
			15.4.4.1 Method of the experiment
				Experimental participants
				Eye-tracking equipment
				Experimental procedure
			15.4.4.2 Results
				Eye movement measurement results
			15.4.4.3 Discussion
	15.5 Conclusion
	References
16 The contingent focus model and bad decisions
	16.1 Situation dependence of decision-making and bad decisions
	16.2 Framing effect as situation-dependent preference reversal
	16.3 Inadequacy of utility theory for explaining the framing effect
	16.4 Prospect theory explains the framing effect and its problem
	16.5 Concept of the contingent focus model
	16.6 Formulation of contingent focus model
	16.7 Representation theorem of contingent focus model
	16.8 Conclusion and future perspective
	References
17 An experiment on, and psyschometric analysis of, the contingent focus model
	17.1 Risk attitudes and the contingent focus model
		17.1.1 Properties of risk attitudes under the assumption of a contingent focus model
			17.1.1.1 Risk aversion
			17.1.1.2 Risk neutrality
			17.1.1.3 Risk-seeking
		17.1.2 Proof of the nature of the risk attitude
	17.2 Experiment of contingent focus model and measurement
		17.2.1 A simple parameter estimation method for contingent focus model
		17.2.2 A simple estimation method in which the choice ratio and utility are considered to be ratio scale
		17.2.3 Estimating the strength of preferences that can be rated
		17.2.4 Estimation method assuming utility with error term
	17.3 Experiment of contingent focus model
		17.3.1 Experiment of the contingent focus model and the focusing hypothesis 1: experiment of the reflection effect
		17.3.2 Experiment of the contingent focus model and the focusing hypothesis 2: Asian disease problem
		17.3.3 Quantitative analysis of the experimental results
		17.3.4 Testing the focusing hypothesis of the contingent focus model using the information monitoring acquisition method
			17.3.4.1 Experiment 3.4.1: the Asian disease problem
			17.3.4.2 Experiment 3.4.2: a variant of the Asian disease problem
			17.3.4.3 Experiment 3.4.3: reflection effect problem
		17.3.5 Discussion of the experimental results
	17.4 Conclusion and future perspectives
	References
18 The contingent focus model and its relation to other theories
	18.1 Expected utility theory
	18.2 A counterexample to expected utility theory: Allais paradox
	18.3 Nonadditive probability and nonlinear utility theory
	18.4 Why nonlinear utility theory cannot explain the framing effect
	18.5 Framing effects and prospect theory
	18.6 Relationship between the contingent focus model and nonlinear expected utility theory and prospect theory
	18.7 Conclusion and future perspectives
	References
19 The mental ruler model: Qualitative and mathematical representations of contingent judgment
	19.1 Contingent judgment
	19.2 Contingent judgment and the problems in its modeling
		19.2.1 Contingent judgment
		19.2.2 Why is it difficult to explain contingent judgment by utility theory?
		19.2.3 Existing models explaining contingency of judgment
			19.2.3.1 Decision frame model
			19.2.3.2 Psychological purse model
			19.2.3.3 Rage–frequency model
		19.2.4 Problems of the previous contingent judgment models
	19.3 Qualitative description of “mental ruler”
		19.3.1 Basic hypothesis of the model and basic property of mental ruler
			19.3.1.1 Basic property 1: the ruler has graduation
			19.3.1.2 Basic property 2: the ruler length is bounded (boundedness)
			19.3.1.3 Basic property 3: the ruler is one-dimensional
		19.3.2 Basic function of mental ruler
			19.3.2.1 Basic function 1: people construct an appropriate mental ruler depending on the situation
			19.3.2.2 Basic function 2: reference points or end points of the ruler are applied differently depending on the situation
			19.3.2.3 Basic function 3: graduation of the ruler becomes particularly finer around the reference point and the end points...
			19.3.2.4 Basic function 4: more knowledge or more involvement creates finer graduation of the ruler
			19.3.2.5 Basic function 5: even if information is given multidimensionally, a one-dimensional judgment is elicited using th...
			19.3.2.6 Basic function 6: it is difficult to compare different mental rulers
		19.3.3 Compatibility of stimulus-response structures as a mental ruler construction principle
	19.4 Mental ruler explanation using set theory and its mathematical description
		19.4.1 Definition of the situation
		19.4.2 Definition of subjective situation
		19.4.3 Structure of mental ruler
		19.4.4 Subadditivity of the mental ruler and its mathematical description
		19.4.5 Threshold as graduation of the mental ruler
		19.4.6 Restructure of the subjective situation and the mental ruler
		19.4.7 Mental ruler as a set function
	19.5 Explanation of experimental findings
		19.5.1 Interpretation of experimental results by Tversky and Kahneman
		19.5.2 Interpretation of the experiment by Hsee
		19.5.3 Interpretation of the evaluation experiment on the value of saved lives
		19.5.4 Interpretation of the perceptual judgment experiment
		19.5.5 Interpretation of price judgment experiment
		19.5.6 Interpretation of probability weighting function
	19.6 Conclusion and future perspectives
	References
20 How attention arises in and influences decision-making
	20.1 Function of attention
	20.2 Psychological model of attention
	20.3 Mathematical model of attention rate to social events
	20.4 Propositions and considerations derived from the model
	20.5 Application to the psychometric model for attention rate to Covid-19 problem
		20.5.1 Purpose of the study
		20.5.2 Analysis and results
		20.5.3 Discussion
	20.6 Control of attention by psychological experiment
		20.6.1 Experiment in which the speed and acceleration of change of the target were controlled
			20.6.1.1 Purpose of the study
			20.6.1.2 Method of the study
			20.6.1.3 Experimental results
			20.6.1.4 Discussion
		20.6.2 Experiments on stimulus variability and attention
			20.6.2.1 Purpose of the study
			20.6.2.2 Proposal of attention manipulation method
			20.6.2.3 Method of the experiment
			20.6.2.4 Results
			20.6.2.5 Discussion
	20.7 Model of category focusing and construction of mental ruler
		20.7.1 Prospect theory and the mental box model
		20.7.2 Category-focusing hypothesis and the mental box model
			20.7.2.1 Range–frequency theory
			20.7.2.2 Category-focusing hypothesis
			20.7.2.3 Explanation of situation-dependent judgment phenomena by the category-focusing hypothesis
			20.7.2.4 Composition of the mental ruler model from the mental box model and its relationship to the range and frequency model
		20.7.3 Empirical study of mental box model
			20.7.3.1 Purpose of the experiment
			20.7.3.2 Method
			20.7.3.3 Results
			20.7.3.4 Discussions
	20.8 Conclusion and future perspective
	References
21 Escaping from bad decisions and future perspective
	21.1 Epistemology of bad decision
	21.2 Individual decision and group decision strategies
	21.3 Situational dependence of individual decision-making and its psychological laws
	21.4 Nudges, boosts, and metacognition
	21.5 Metacognitive model of decision-making process
	21.6 Conclusion
	References
Author Index
Subject Index
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