The processing of complex information! A comparison on hypothetical and performance based payoff decisions

Eike Kroll, Joerg Rieger () and Bodo Vogt ()
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Joerg Rieger: Otto-von-Guericke-University Magdeburg
Bodo Vogt: Otto-von-Guericke-University Magdeburg

Economics Bulletin, 2014, vol. 34, issue 1, 41-50

Abstract: This paper investigates the processing of repeated complex information. The focus of this study is whether additional information and the introduction of performance-based payoffs have an influence on judgment. Therefore, an experiment is designed to investigate the degree of precision and of quality in interval estimates. The data shows that providing additional information decreases the precision of stated estimates, while it improves its quality. The same result is obtained when performance-based payoffs are introduced to an otherwise hypothetical decision environment. This means that, while the variation in the treatment variables increases the quality of the estimate, the precision as a reflection of the decision maker's confidence is reduced.

Keywords: interval estimates; uncertainty; judgmental estimation; repeated information; incentive effects (search for similar items in EconPapers)
JEL-codes: C9 D8 (search for similar items in EconPapers)
Date: 2014-01-14
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