Effort and Accuracy in Choice

Eric J. Johnson and John W. Payne
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Eric J. Johnson: Graduate School of Industrial Administration, Carnegie-Mellon University, Pittsburgh, Pennsylvania 15213
John W. Payne: Fuqua School of Business, Duke University, Durham, North Carolina 27706

Management Science, 1985, vol. 31, issue 4, 395-414

Abstract: Individuals often use several different strategies such as the expected value rule, conjunctive rule, and elimination-by-aspects, to make decisions. It has been hypothesized that strategy selection is, in part, a function of (1) the ability of a strategy to produce an accurate response and (2) the strategy's demand for mental resources or effort. We examine effort and accuracy and their role in strategy selection. Several strategies that may be used to make choices under risk are simulated using a production system framework. This framework allows the estimation of the effort required to use the strategy in a choice environment, while simultaneously measuring its accuracy relative to a normative model. A series of Monte-Carlo studies varied several aspects of the choice environments, including the complexity of the task and the presence or absence of dominated alternatives. These simulations identify strategies which approximate the accuracy of normative procedures while requiring substantially less effort. These results, however, are highly contingent upon characteristics of the task environment. The potential of production system models in understanding task effects in decisions is stressed.

Keywords: decision making; simulation; heuristics (search for similar items in EconPapers)
Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:31:y:1985:i:4:p:395-414

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