“Take-the-Bestâ€\x9D and Other Simple Strategies: Why and When they Work “Wellâ€\x9D with Binary Cues

Robin Hogarth () and Natalia Karelaia ()

Theory and Decision, 2006, vol. 61, issue 3, 205-249

Abstract: 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 weighted; characteristics of choice sets; and error. In the absence of error and for cases involving from three to five binary cues, TTB is effective across many environments. However, hybrids of equal weights (EW) and TTB models are more effective as environments become more compensatory. As error in the environment increases, the predictive ability of all models is systematically degraded. Indeed, using the datasets of Gigerenzer et al. (1999, Simple Heuristics That Make Us Smart, New York: Oxford University Press), TTB and similar models do not predict much better than a naïve model that exploits dominance. Finally, we emphasize that the results reported here are conditional on binary cues. Copyright Springer 2006

Keywords: decision making; bounded rationality; lexicographic rules; take-the-best; equal weighting (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1007/s11238-006-9000-8

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