Decision Making and Change in Human Affairs: Proceedings of the Fifth Research Conference on Subjective Probability, Utility, and Decision Making, Darmstadt, 1–4 September, 1975

524 Pages·1977·13.43 MB·English

by  Helmut Jungermann

DECISION MAKING AND CHANGE IN HUMAN AFFAIRS
THEORY AND DECISION LIBRARY
AN INTERNATIONAL SERIES
IN THE PHILOSOPHY AND METHODOLOGY OF THE
SOCIAL AND BEHA VIORAL SCIENCES
Editors:
GERALD EBERLEIN, University of Saarland
WERNER LEINFELLNER, University of Nebraska
Editorial Advisory Board:
K. BORCH, Norwegian Schools of Economics and Business Administration
M. BUNGE, McGill University
J. S. COLEMAN, University of Chicago
W. KROEBER-RIEL, University of Saarland
A. C. MICHALOS, University of Guelph
A. RAPOPORT, University of Toronto
A. SEN, University of London
W. STEGMULLER, University of Munich
K. SZANIAWSKI, University of Warsaw
L. TONDL, Prague
VOLUME 16
DECISION MAKING AND CHANGE
IN HUMAN AFFAIRS
Proceedings of the Fifth Research Conference on Subjective
Probability, Utility, and Decision Making, Darmstadt, 1-4 September, 1975
Edited by
HELMUT JUNGERMANN
Technische Hochschule Darmstadt, B.R.D.
and
GERARD DE ZEEUW
Universiteit van Amsterdam, Holland
D. REIDEL PUBLISHING COMPANY
DORDRECHT-HOLLAND / BOSTON-U .S.A.
ISBN-13: 978-94-010-12784SBN 90-e.a$8N)U:S9-7.l-94-010-1276-8
DOl: 10.1007/978-94-010-1276-8
Published by D. Reidel Publishing Company,
P.O. Box 17, Dordreeht, Holland
Sold and distributed in the U.S.A., Canada and Mexico
by D. Reidel Publishing Company, Inc.
Lincoln Building, 160 Old Derby Street, Hingham,
Mass. 02043, U.S.A.
All Rights Reserved
Copyrighi © 1977 by D. Reidel Publishing Company, Dordreeht, Holland
and eopyrightholders as specified on appropriate pages within.
No part of the maSuftdqmlltmpeitJtbyfubis ~gbt iHltfditinoy\ Dil1'eprodueed or
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retrieval system, without written permission from the copyright owner
Printed in The Netherlands
TABLE OF CONTENTS
Preface
VII
List of Participants XI
Part I: AppY'oaches to Real-Life Situations: Pr>oblems of ImpY'ovement
Editors' Introduction 3
P. Slovic, B. Fischhoff, and S. Lichtenstein: Cognitive Pro-
cesses and Societal Risk Taking 7
H. Jungermann: Cognitive Processes and Societal Risk Taking/
Comments 37
A. H. Murphy and R. L. Winkler: The Use of Credible Intervals
in Temperature Forecasting: Some Experimental Results 45
R. Kietlinski: Decisions Concerning Job Choice 57
E. Hession: The Application of Multi-Attribute Utility Models
to some Uncertain Decision Situations in Areas of Business
and Public Policy 67
K. M. Aschenbrenner: Influence of Attribute Formulation on the
Evaluation of Apartments by Multi-Attribute Utility Proce
dures 81
E. Jaquet-Lagreze: Modelling Preferences Among Distributions
using Fuzzy Relations 99
G. R. Chesley: Subjective Probability Elicitation: A Comparison
of Performance Variables 115
R. L. Winkler: Rewarding Expertise in Probability Assessment 127
J. A. Wise: The Psychology of the Ouija Board 141
Part II: Analysis and ImpY'ovement of Models and Methods
Editors' Introduction 161
P. Humphreys: Application of Multi-Attribute Utility Theory 165
v. Bauer and M. Wegener: Applications of Multi-Attribute
Utility Theory/Comments 209
J. L. Grzelak, T. B. Iwinski, and J. J. Radzicki: "Motiva-
tional" Components of Utility 215
VI TABLE OF CONTENTS
R. M. Hogarth: Methods for Aggregating Opinions 231
M. Toda: Methods for Aggregating Opinions/Comments 257
C.-A. S. Stael von Holstein: The Continuous Ranked Probability
Score in Practice 263
S. Lichtenstein, B. Fischhoff, and L. D. Phillips: Calibration
of Probabilities: The state of the Art 275
K. Borcherding: Calibration of Probabilities: The State of
the Art/Comments 325
R. E. Schaefer, K. Borcherding, and C. Laemmerhold: Consistency
of Future Event Assessments 331
H. Montgomery: A Study of Intransitive Preferences Using a
Think Aloud Procedure 347
Part III: Perspectives for Further Inquiry in Decision Theory
Editors' Introduction 365
T. S. Wallsten: Measurement and Interpretation of Beliefs 369
G. de Zeeuw: Measurement and Interpretation of Beliefs/Comments 395
G. F. Pitz: Decision Making and Cognition 403
D. Wendt: Decision Making and Cognition/comments 425
E. Hollnagel: Cognitive Functions in Decision Making 431
G. D. Kleiter: Optimal Policies, Degradation, and Cognition 445
M. Toda: Optimal Policies, Degradation, and Cognition/Comments 455
W. A. Wagenaar: Decision Making and Numerical Structuring 461
A. F. M. Smith: Bayesian Statistics and Efficient Information
Processing Constrained by Probability Models 479
W. W. Gasparski and K. Szaniawski: Praxiology and Decision
Theory 491
L. D. Phillips and C. N. Wright: Cultural Differences in Viewing
Uncertainty and Assessing Probabilities 507
Index of Names 521
PREFACE
It is only just recently that people have the tools to judge how well
they are doing when making decisions. These tools were conceptualized in
the seventeenth century. Since then many people have worked to sharpen
the concepts, and to explore how these can be applied further. The problems
of decision-making and the theory developed correspondingly have drawn
the interest of mathematicians, psychologists, statisticians, economists,
philosophers, organizational experts, sociologists, not only for their
general relevance, but also for a more intrinsic fascination.
There are quite a few institutionalized activities to disseminate
results and stimulate research in decision-making. For about a decade
now a European organizational structure, centered mainly around the psy
chological interest in decision-making. There have been conferences in
Hamburg, Amsterdam, Uxbridge, Rome and Darmstadt. Conference papers have
been partly published+. The organization has thus stabilized, and its re
latively long history makes it interesting to see what kind of developments
occurred, within the area of interest.
In general, it seems to us, the developments are not only characterized
by a trend towards greater precision in measurement of towards genera
lization of results. Some major types of emphasis, of changing general
research questions, can be detected: the first conferences began with a
great interest in trying to isolate what people actually do when making
decisions, i.e., in a laboratory situation. It was supposed that the for
mal theory of decision could be seen as a standard for decisions, and the
question was to get some idea of the differences of this standard with
actual human decision-making. And that, of course, seemed more pos-
sible in simple laboratory situations than otherwise. This line of explo
ration started with experiments locating differences between subjective
ly expressed quantities, and • standards , - probabilities as well as uti-
+ G. de Zeeuw, C.A.J. Vlek & W.A. Wagenaar (Eds.), Subjective probabi
lity - theory, experiments, applications. Acta Psychologica, 34, No.
2/3, 1970; D. Wendt & C.A.J. Vlek (Eds.), Subjective probability, utili
ty, and human decision making, Reidel, Dordrecht 1975.
VIII PREFACE
lities.
Many and varied differences were found. To a large extent however,
these seemed attributable to the laboratory situation, the approach
of strict concentration on clearly structured, simple tasks. This
finding initiated a second type of emphasis: more intensive study of
decision-making in 'real life' situations. A great many interesting
findings on practical applications have come forward, some even with
economic value. A serious problem, however, is that many aspects seem
important; ofnen too many, even for the sophisticated tools of analysis
that are being developed. Moreover, there is little stability in the
aspects that seem to matter, in expectations and evaluations.
These problems probably have suggested the third kind of emphasis.
An important question here is how formal decision theoretic concepts re
late to other ways of structuring people's actions, and how they in
particular can help to improve the quality of such actions. The increa
sing interest in decision-aids can be understood this way. These can
be representations of data, which can be made available quickly and clear
ly to the decision maker. They can also be instructions, based on deci
sion theory, to facilitate people mimicking good decisions, as defined
by decision theory. The quality of decision-making is enhanced by raising
the awareness of the decison maker and structuring his problem.
The latter interest has led to more intensive search for links between
knowledge about people's functioning - cognitively, affectively - and
the decision processes. Important questions obviously concern the way
people prepare for a decision, the way they reduce memory-load, or how
they interact with their social or cultural environment as a support
system.
In following these various kinds of emphases a wide area has been
covered, with many results sharpening decision theory as a conceptual
tool for action, and as a framework for getting to know what people
do. The present proceedings give a fair review of such developments -
next to what has been tried as improvement of earlier results, proven
valuable.
The papers of the conference have been combined in a manner, diffe
rent from the original set-up in Darmstadt. The program consisted
PREFACE IX
of review papers, providing background and recent ideas, specific pa
pers, panel discussions, and reports of ongoing research. The latter
two are not reported here. Also, the review papers served as center
pieces. In this volume, however, we preferred to group the various papers
under three headings, which seems to us a better way to convey the mea
ning of the actual questions tackled.
The first one heads papers in which various aspects are analysed of
the use of decision theory, as part of the structure of an intricate
'real-life' situation. In such situations many types of side-effects
and influences can occur, when the area of use is not perfectly iso
lated from the rest of the situational structure. Thus there can be in
fluences of the work-setting, effects on society when high risk-areas
are incorrectly indicated, influences of past performance, and the
like. These aspects pertaining to the context of use can of course be
both good and bad. To control them they should be known.
A second heading centers on the elaboration of a number of aspects
within decision theory. The construction of models for various situa
tions via the decomposition procedure is shown, various methods for
composition of opinions, consistency of estimates, and the like. Also,
the suppositions of theories, models and methods are explored care
fully. Sometimes such elaboration needs special sources of informa
tion, such as when verbal protocols are used to understand intransi
tivities.
The third heading stands for papers in which, more speculatively,
areas for future studies are explored. For example, an effort has been
made to relate axiom systems to cognitive theories and systems, to
other'theories of human acion,and to cultural backgrounds. The scope
of decision theory is thus enriched and varied, by analogy and by
direct combination - and this enrichment of course is a s.ound base
for further research. One could say that decision theory here is not
considered as part of 'real-life' situations, but as one particular
kind of sound knowledge about such situations.
It is hoped that this tripartition helps the reader in selecting
what is most relevant for him, and at the same time that it orders
the area constructively.
x PREFACE
A conference is made by people. The contributions of some of them are
clearly visible, as reports, in discussions, with appropriate laurels.
The contribution of many others, however, is mainly invisible, and re
cognition therefore sometimes slow: checking hotel reservations, testing
restaurants, typing manuscripts, handling mail, summarising questionnaires
preparing conference materials. Such work is, however, essential. We
thank therefore Angelika Quandt, Gerhard Hunkel, and Ursula Zimmermann
Ullrich for their activities as student-assistants, and Ms. Hannelore
Rusch, Ms. Ingrid Kumbier, and Ms. Anneke Beijer for their work as secre
taries. We also wish to thank all participants of the conference who
helped us in editing this book by refereeing the contributed papers,
and Jim Wise for his contributions to the organizittion from outside the
Organizing Committee. Finally, we are greatly indebted to Sarah Lichten
stein and Jozef Kozielecki, the two other members of the Organizing Com
mittee; they shared with us all the intellectual and emotional efforts
connected with the preparation of a research conference. Grants from
the Deutsche Forschungsgemeinschaft, the Hessische Kulturminister, and
the Universiteit van Amsterdam, as well as the support of the President
of the Technische Hochschule Darmstadt, contributed greatly to the suc
cess of the Conference.
Darmstadt/Amsterdam Helmut Jungermann
November 1976 Gerard de Zeeuw