Decision processes brown bag, 2003-2004

12-1:30 PM, Monday
Jon M. Huntsman Hall, room F55

Sept 15 Christian Wheeler (Stanford) Effects of Stereotype and Trait Primes on Persuasion
Sept 22 Peter Huang (Penn Law School) Effective Regulation of Affective Investing: Regulating Emotional Investing in Bipolar Securities Markets
Sept 29 NO TALK
Oct 6 NO TALK (Yom Kippur)
Oct 14 FALL BREAK
Oct 20 Laurie Weingart (CMU) Modeling Evolution of Negotiating Groups over Time
Oct 27 Tim Wilson (Virginia) Affective Forecasting and the Pleasures of Uncertainty
Nov 3 Joel Waldfogel (Penn Econ) Does consumer irrationality trump consumer sovereignty?
Nov 10 JDM
Nov 17 David Rousseau (Penn Poli Sci) Belief Systems and Information Search in International Relations: An Experimental "Information Board" Study
Nov 24 No talk.
Dec 1 Josh Metlay (Penn Med) Antibiotic prescribing decisions

Coming in Spring 2004: Nicholas Epley, Greg Fischer, Andy Gurmankin, Melanie Green, Peter Ubel, Kevin McCabe, Yaacov Trope.


Other relevant events on campus

Applied economics workshop

Past years

2002-03

2001-02

2000-01

1999-2000

Spring 1999


Jonathan Baron, web page maintainer

Abstracts

The Impact of Online Product Review Characteristics on Consumer Preferences
Donna Hoffman, Tom Novak, and Fang Wan

To date, most research on online recommendations has focused on the computer algorithms underlying recommendations (e.g., Ansari et al.2000) or the impact of recommender systems on consumers' search effort and decision quality (Haubl & Trifts 2000; Lynch & Ariely 2000). However, little research has examined the impact of various characteristics of human-generated recommendations, such as peer reviews, on consumers' evaluations and preferences. In this paper we adopt a social cognitive framework to examine the impact of two types of information cues of online product reviews on preference in an online retailing environment. In a comprehensive online experiment, we manipulated consumer mindset, consumer purchasing goals, reviewer characteristics, and review characteristics and assessed their impact on key marketing outcomes involving the product, the review, and the reviewer. Results so far suggest that a consumer's cognitive frame differentially affects the impact of cue congruity on consumer response.


Effective Regulation of Affective Investing: Regulating Emotional Investing in Bipolar Securities Markets
Peter Huang

This Article investigates that question by analyzing emotional investing. This Article analyzes the regulatory implications of emotional reactions to securities disclosures. U.S. federal securities laws mandate the disclosure of information, but regulate only the cognitive form and content of that information. An important and unstudied question is what problems exist if people respond not only cognitively to the form and content of information, but also emotionally to the form and content of information. This Article investigates that question by analyzing emotional investing. This Article contributes to the long-standing debate over mandatory (securities) disclosure by examining the emotional costs and benefits of such disclosures. This Article develops how and why the core notions of the reasonable investor and materiality should be revised in light of emotional investing. This Article proposes modifying three recent developments in materiality doctrine to take into account emotional investing. In particular, this Article argues that judicial treatment of puffery is flawed when it neglects the emotional power of puffery. This Article also recommends modifying the "total mix" analysis of materiality to include the "total affect" of information. Finally, this Article proposes refining the "bespeaks caution" doctrine and statutory safe harbors codifying it to inquire whether "meaningful cautionary language" has emotional appeal.


Modeling Evolution of Negotiating Groups over Time
Laurie Weingart, Carnegie Mellon University

Understanding how dyadic negotiations and group decision processes evolve over time requires specifying the basic elements of process, modeling the configuration of those elements over time, and providing a theoretical explanation for that configuration. Previously, we have focused on what negotiators do on their way toward agreement or impasse (Lytle et al, 1999; Olekalns et al, 1996; Weingart et al, 1990, 1999). In this chapter we extend our theorizing about evolutionary processes to negotiating groups. We propose a bead metaphor and framework for conceptualizing the basic elements of the group negotiation process and extend that metaphor by stringing beads of behavior in different configurations that reveal a helix model of the process by which group negotiations evolve. Our theorizing draws on the group decision development literature (e.g., Bales, 1953; Poole 1981, 1983a, 1983b; Poole & Roth, 1989a, 1989b) as well as on the negotiation process literature (e.g., Gulliver, 1979; Morley & Stephenson, 1977). Our examples are from our Towers Market studies of negotiating groups.


Affective Forecasting and the Pleasures of Uncertainty
Timothy D. Wilson, University of Virginia

Many important decisions, such as what job to accept, who to marry, and where to go on vacation, are based on affective forecasts--people's predictions about their emotional reactions to future events. One error people often make is the impact bias, the tendency to overestimate the enduring impact that future events will have on their emotional reactions. I will review research documenting the impact bias and several of its causes. I will focus on the inexorable human tendency to make sense of novel events, in ways that rob them of their emotional power. By failing to anticipate the extent to which they will psychologically transform novel, exciting events into ordinary, mundane ones, people overestimate the enduring emotional impact these events will have. One implication of this argument is that if people can be prevented from making sense of positive events, the pleasure that these events cause might be prolonged. I will present evidence for this "pleasure of uncertainty effect" and discuss its implications.


Does consumer irrationality trump consumer sovereignty?"
Joel Waldfogel (Penn Econ)

Scholars working on the border of economics and psychology have documented many contexts in which individual decision- making is unreliable and might be improved by paternalistic interventions. Against this mounting body of negative evidence is an empirical vacuum. Economists' default belief in consumer sovereignty has been motivated by theory rather than evidence. The goal of the present study is to see whether there is evidence supporting economists' faith in consumer sovereignty in a simple context. We address this question by examining how well individuals make current consumption decisions. Based on a new survey of both holiday gifts and items consumers purchase for themselves, we present direct evidence that consumers' own purchases generate between 10 and 18 percent more value, per dollar spent, than items received as gifts. The results identify a sphere of individual decision-making where consumer sovereignty is warranted, and, in addition, confirm the substantial deadweight loss of Christmas. JEL code: D12.


David Rousseau (Penn)
Belief Systems and Information Search in International Relations: An Experimental "Information Board" Study

This study examines the role of material factors (e.g., the balance of military power) and ideational factors (e.g., a shared ethnic identity) in the perception of threat posed by "other" states in the international system. Employing an experimental technique known as an "information board," the study monitors the information search process of the subjects (n=131). The findings reveal that individuals with "realist" belief systems, as measured by a ten item pre-test, were more likely to quickly access information about material factors. Conversely, individuals with "liberal" belief systems were more likely to quickly access information about the level of democracy in the other country. The study advances the international relations literature by identifying the conditions under material factors are likely to dominate and by proposing a new method to disentangle material and ideational factors in world politics.


Josh Metlay (Penn)
Antibiotic prescribing decisions

Physicians have increasingly found themselves in the center of activities surrounding the appropriate balance of public and individual interests in medical care decision making. One example is the role played by physicians in the prescribing of antibiotics. Optimal use from the perspective of the community (reserving newer antibiotics for future use) is not always consistent with optimal use from the perspective of the individual patient (prescribing newer, broader antibiotics). As part of this presentation, we will discuss results from a national mailed survey of generalists and infectious diseases specialists to examine the impact of public health issues on individual physician decision making. The survey used clinical vignettes to examine relative preferences for hypothetical older and newer antibiotics for the treatment of patients with respiratory infections in the setting of emerging antibiotic drug resistance. In addition to discussing results of the completed survey, we will discuss some examples of ongoing studies aimed at identifying attitudes and beliefs that drive antibiotic prescribing decisions. Finally, we will discuss an ongoing interventional trial designed to improve the quality of antibiotic prescribing in ambulatory care settings.