Research Group “Cognitive Processes Underlying Economic Decision-making”

Download this chapter as pdf-file


C.V   Research Group  “Cognitive Processes Underlying    Economic Decision-making”

Head: Dr Susann Fiedler

Since January 2014, the Gielen-Leyendecker Junior Research Group has been part of the institute, complementing the scientific work on collective goods by providing a process perspective on decision-making. The group was installed with the aim of contributing to our understanding of the interplay of individual and situational factors affecting decision behavior, and focuses on two major challenges: (1) Understanding the underlying cognitive and affective processes leading up to a choice and (2) identifying the channels through which situational as well as personality factors operate. We made progress on both lines of work by combining basic psychological research on information search and processing as well as arousal with incentive-compatible research paradigms. A special focus is on interactions which arguably involve social preferences. The comprehensive model comparison and investigation of factors that influence information-processing in economic decision-making is conducted jointly by the psychologists in the group, and supported by collaborations with lawyers and economists from the institute. A wide set of different projects have been started since the beginning of 2014, and the group has grown into a research collaboration that I as the head of the group feel really lucky to be a part of.

C.V.1  Social Dilemmas

In multiple projects, the group‘s work focuses in particular on the information-weighting process while making an interdependent decision in social dilemma situations. We were particularly interested in two major questions: (1) What variables determine the extent and depth of information search? (2) In which manner are attentional processes related to information utilization? We investigated these questions in the context of decomposed dictator games and present evidence for an influence of social preferences on the extent and pattern of information search in nonstrategic (Fiedler, Glöckner, Nicklisch & Dickert, 2013) and strategic (Ghaffari & Fiedler) social dilemma situations. This relationship is robust to changes in the incentive structure by variations in payoff schemes (Fiedler, Glöckner & de Dreu), framing (Fiedler & Hillenbrand), cognitive load and time pressure (Fiedler & Lillig), as well as the decision setup (Rahal, Fiedler & de Dreu).

Building up on this first line of research, which shows the strong link between social preferences and attention (Fiedler, Glöckner, Nicklisch & Dickert, 2013), as well as between attention and social decision-making (Ghaffari & Fiedler), we were curious about the potential subsequent effects of these interrelations. In a joint project by Minou Ghaffari, Bettina von Helversen, and Susann Fiedler, we replicate the link between social preferences and the extent of information search. Specifically, prosocial individuals invest more time in their search for information in decomposed dictator games, and in this particular setting are more likely to inspect the face of their interaction partner. As a result of this, prosocials show better memory performance when asked for their interaction partners’ behavior than individuals who have rather individualistic preferences (Ghaffari, Fiedler & von Helversen).

As shown in previous work, identifying one’s interaction partner as an ingroup or outgroup member has important implications for behavior in social decision-making. Extending this work on intergroup decision-making, a set of studies conducted by Rima-Maria Rahal, Carsten de Dreu, and Susann Fiedler showed the influence of group belonging on the decision-making efforts, as well as the payoff-weighting in social dilemma situations (Rahal, Fiedler & de Dreu). Utilizing this pivotal role of group membership information to gain insights into the nature of choice construction in group contexts, we experimentally varied the point in time when group identifiers are presented in a follow-up project (Fiedler & Rahal). To test the generalizability of drivers of ingroup favoritism identified in the lab, we extended our work by additionally conducting cross-cultural intergroup experiments with representative samples from the US, Chile, Peru, Colombia, and Venezuela. The results show more ingroup favoritism in Latin Americans compared to US Americans. While US Americans mainly follow an equal split norm in ingroup and outgroup interactions, Latin Americans only do so in ingroup interactions (Hellmann, Fiedler, Dorrough & Glöckner, in press). Identifying the drivers of prosocial behavior in intergroup situations and understanding their interplay even further, we conducted a study where we had students decide about the size of advent gifts for a set of outgroups that varied with regard to their cultural and social distance and their perceived competition and wealth (Hellmann, Fiedler & Glöckner).

C.V.2  Moral Decision-making

Research on ethical decision-making gained many new insights into the cognitive, social and situational underpinnings of dishonesty. A number of common approaches deal with dishonesty and cheating as a conscious decision driven by money-maximizing motives. Yet, previous studies on bounded ethicality show evidence that processes leading to unethical decisions might partly be unconscious and a result of motivated information search and reasoning. Using eye-tracking as a means of recording arousal and information search during a simple decision task, the group showed the influence of temptation and subsequent cheating on the underlying processes of decision-making (Hochmann, Glöckner, Fiedler & Ayal, 2015). Broadening the scope of this work by testing the generalizability of the observed processing patterns, we additionally introduced ambiguity into the decision paradigm. In everyday decision-making, the value of a potential choice often has to be searched for prior to the decision. By introducing this ambiguity about the true values, we include an essential part of the decision-making process. Ambiguity was introduced to the decision setup as follows: Will I engage in a possibly costly information search to obtain information about the underlying values, even though they are unrelated to the actual decision task (Fiedler & Weisel)? As another measure to test the generalizability, we conducted an experiment varying the severity of the norm violation through cheating (Fiedler & Glöckner). Arousal as well as cognitive load present themselves as very reliable predictors in different normative contexts. As a consequence, we are currently working on implementing an experimental paradigm to induce real-world stress on participants and measure the respective hormonal and decision changes when experiencing a situation in which unethical behavior is possible (Antoniou, Fiedler & Derntl).

Focusing on moral dilemmas as another important part of the moral decision-making literature, Rima-Maria Rahal and Susann Fiedler conducted – in joint work with Leonard Hoeft, a legal scholar of the institute – a series of experiments to investigate Greene’s Dual Process Theory. Taking again a cognitive processing approach by using eye-tracking, we show distinct information search processes for utilitarian and deontological decisions in moral dilemmas and plan to extend the work to third-party dictator games (Rahal, Hoeft & Fiedler). Additional work by Minou Ghaffari addresses the question of the underlying processes of moral decision-making. However, instead of using the eye-tracking device as a pure outcome measure, we extend the work on gaze-contingent paradigms here, and designed a set of experiments in which decision cues were given as a function of the attended information. We find that the link between attention and the type of choice made is driven by up to 40% through the bottom-up influence of attention on choice, while the remaining variance is explained by the top-down preference formation (Ghaffari & Fiedler). Applying our new knowledge on the bottom-up effect of attention to different contexts, we instructed participants in a follow-up project to focus on two different social norms when making decisions as bystanders (Hu, Fiedler & Weber). Following the same logic, we also tested this bottom-up effect in the context of risky choices, and the results show nicely how choices change according to the information presented in the decision-maker’s attentional focus (Fiedler, Henninger, Glöckner & Hilbig).

In a review of the current literature, we bring some of our own findings together with those made by others, and show how understanding the cognitive underpinnings – and, in particular, attention as part of the process – helps us to understand moral decision-making (Fiedler & Glöckner, 2015).

C.V.3  Ignorance

What started out as a simple observation – that many participants ignore parts of the presented information completely in a wide range of settings – grew to become a new line of research in the past years. Specifically, we investigated the role of (deliberate) ignorance in the context of intergroup dilemmas (Rahal, Fiedler & de Dreu), advice utilization in simple estimation tasks (Rittich, Fiedler & Schultze), as well as hiring decisions (Dorrough, Fiedler & Schild). By focusing on personality and situational factors driving the decision to ignore information, we identified a set of relevant personality variables including inequality aversion. Within the last project, we started to explore the procedure of masking category information (i.e., gender and race) from employers as a tool to reduce employment discrimination. The main goals of this line of work are (1) directly to examine the efficacy of a masking procedure (and its possible alternatives) with respect to reducing discrimination in the workplace; (2) to understand the underlying cognitive processes in hiring decisions in general and under usage of a masking procedure in particular; and (3) to offer legal policy-makers a behaviorally informed roadmap on how to improve masking procedures as well as the effect of other relevant regulations (e.g., equal opportunity, privacy laws).

C.V.4  Risky Choices

In several projects, the group‘s work has contributed to understanding the underpinnings of risky choices. Using a parametric approach based on cumulative prospect theory (CPT) as well as process tracing, we conducted multiple experiments and re-analyses of a modelling competition, as well as previously published studies to investigate the differences between experience-based and description-based decisions (Glöckner, Hilbig, Henninger & Fiedler, 2016; Glöckner, Fiedler, Hochmann & Ayal, 2012). The results show that the previously suggested differences in choice patterns (the so-called description-experience gap) in these two decision domains are systematically reversed, once sampling biases are controlled for: We find a reduced sensitivity to probabilities and an increased overweighting of small probabilities in decisions from experience, as compared to decisions from descriptions.

Focusing only on description-based decisions and building on earlier work on the dynamics of risky-choice decision-making (Fiedler & Glöckner, 2012), another project considers the approach-avoidance distinction in the risky-choice domain, with a focus on how it changes the mental representation of otherwise identical payoffs. The results provide first evidence that the underlying process of evidence accumulation varies systematically between the loss and gain domain (Fiedler & Glöckner).

Eye-tracking has been proven to be a great tool to investigate the extent of the cognitive load, as well as the arousal experienced (Glöckner et al., 2012), but it is limited in its ability to distinguish between positive and negative arousal. With this in mind, we recently conducted our first study using face-reading software (iMotion) in order to evaluate software performance in standard risky-choice paradigms. The results of this first experiment were not particularly promising, since the correlation between reported emotions and emotions classified through the face-reading software was rather low. The recorded micro-expressions showed no relationship either with the resulting choice behavior, while the self-report strongly did (Schulte-Mecklenbeck & Fiedler).

C.V.5  The Aging Decision-maker

In the last year, we extended our subject pool to older adults (aged 65-90) in order to test some of our findings in the context of limited cognitive resources. As part of the Max Planck International Research Network on Aging, Fedor Levin is particularly active in projects focusing on the involvement of episodic memory in value-based decisions. In a joint study with Bernd Weber, we show that age-related memory decline correlates with increased inconsistencies in value-based decisions due to difficulties in retrieving the information that is necessary for the choice. The results are of particular importance since they speak to the largely ignored unique needs of elderly consumers and the underspecification of decision models due to the lack of variance in the subject populations (Levin, Fiedler & Weber).

C.V.6  Methodological Developments and Debates

In the last four years, social science researchers have become increasingly aware of the irreproducibility of the empirical results (Open Science Collaboration 2012 & 2015) and initiated a debate about potential ways how to face the challenges of irreproducibility. The group is strongly involved in this debate, and the resulting Open Science Movement is developing and evaluating tools that foster transparency and collaboration in the scientific community. In our work, we have developed concrete suggestions to increase the reproducibility of one’s own research by addressing problems and challenges across the research lifecycle of (1) experimental design, (2) conducting the experiment, (3) data analysis, (4) reporting, and (5) overall research strategies (Open Science Collaboration, 2016).

Reproducibility is an important stepping stone to ensure that insights from scientific experiments stand the test of time (Fuchs, Jenny & Fiedler, 2012). One critical component in securing the reproducibility of experimental research findings is a methods section describing all details of the procedure in a way that other researchers can evaluate and, ideally, run the same study again. Correspondingly, a call for a comprehensive description of methods has repeatedly been made in various publications (Asendorf et al., 2013a, 2013b). Standardized reporting practices are a necessary prerequisite for these propositions. A wide range of such standards is available for general-purpose reporting (e.g., APA, JARS). These standards provide a common base for the description of complex research procedures, (statistical) methods, and results. Current reporting practices are still evolving and even when general guidelines for reporting experimental findings exist, specific and easily adoptable guidelines for studies using process measures (e.g., eye-tracking) are still missing. In joint work with Michael Schulte-Mecklenbeck, Frank Renkewitz, and Jacob Orquin, we provide researchers with hands-on advice how to report their work in terms of method and analysis (Fiedler, Schulte-Mecklenbeck, Renkewitz, and Orquin, in preparation). In addition to the development of this guideline, we contribute a new chapter on standards in process reporting and the changing use of eye-tracking technology in the last decade of judgment and decision-making research to the Handbook of Process Tracing Methods for Decision Research: A Critical Review and User’s Guide, 2nd Edition (Fiedler, Schulte-Mecklenbeck, Renkewitz, Orquin, forthcoming). Going even further than tackling the symptoms of the replicability challenge, we describe in a recent publication (Glöckner, Fiedler & Renkewitz, in press) a comprehensive way to make psychological science more reliable though better theorizing, thus pointing to the core of the problem.

Working along these lines, members of the research group have supported additional follow-up projects. For example, Rima-Maria Rahal, Minou Ghaffari, and Susann Fiedler contributed to one of the first Registered Replication Reports, involving 21 different labs, investigating the Social Heuristic Hypothesis stating that altruism is intuitive (Bouwmeester et al., 2017). Lina-Sophia Falkenberg, Sarah Piechowski, and Susann Fiedler were part of a research group evaluating the effect of the introduction of badges in psychological journals (Kidwell et al., 2016). Introducing the option of receiving visible badges for open data, open materials, and pre-registration on the journal level was strongly correlated with an increase in Open Science practices. Badges were subsequently described as effective and cost-efficient signals to improve preservation of data and materials by using independent repositories. In an effort to provide additional tools to scientists that not only increase reproducibility, but also reduce search efforts, we are currently building a database that includes over 230 published individual difference measures. In order to investigate their interrelations, we are using the Web of Science citation network to discover connections of constructs and isolated measures. In cooperation with the library team, we plan to create an easy-to-use tool that will allow the members of the institute in the first place, and later also the broader scientific community, to use our database for a systematic review of available measures.

Outlook

Many of the projects described above are still in progress and have opened up new questions, which we plan to follow up on in the future. For example, we are currently planning to extend our work on framing to understand how reference points (with Holger Rau and Stephan Müller) and defaults (with Andreas Glöckner and Sebastian Berger) guide the construction process of individual choices. Further, evidence on prosocial preferences being positively connected not only to prosocial behavior, but also to an increase in memory performance in social interactions, opens up a number of intriguing questions. For example, in which way does this memory advantage play out in the context of recognizing familiar interaction partners, and how does it affect the likelihood of interacting with these partners (endogenous sorting)?

In the next two years, we plan to continue and extend our work along the introduced lines using our expertise about cognitive processes to branch out to more applied research questions. For example, targeting decisions in the context of tax evasion (proposal together with Professor Christoph Kogler & Professor Anthony Evans, under review at the DFG), negotiations (proposal together with Professor Michal Krawczyk, under review at the DFG funding initiative BEETHOVEN 2) and hiring decisions. The group’s work will further concentrate on experimental work with a strong process orientation and interdisciplinary focus, as well as the meta-science issues of transparency and theory development in social science.

 

References

Antoniou, R., Fiedler, S. & Derntl, S. (in preparation). Examination of hormonal activation during deception under the effect of induced stress

Asendorpf, J. B., Conner, M., De Fruyt, F., De Houwer, J., Denissen, J. J. A., Fiedler, K., Fiedler, S., Funder, D. C., Kliegl, R., Nosek, B. A., Perugini, M., Roberts, B. W., Schmitt, M., van Aken, M. A. G., Weber, H. & Wicherts, J. M. (2013a). Replication is More than Hitting the Lottery Twice. European Journal of Personality, 27, 138–144

Asendorpf, J. B., Conner, M., De Fruyt, F., De Houwer, J., Denissen, J. J. A., Fiedler, K., Fiedler, S., Funder, D. C., Kliegl, R., Nosek, B. A., Perugini, M., Roberts, B. W., Schmitt, M., van Aken, M. A. G., Weber, H. & Wicherts, J. M. (2013b). Recommendations for Increasing Replicability in Psychology. European Journal of Personality, 27, 108–119

Bouwmeester, S., Verkoeijen, Peter P., Aczel, B., Barbosa, F., Bègue, L., Brañas-Garza, P, Chmura, T, Cornelissen, G., Døssing, F., Espín, A., Evans, A., Ferreira-Santos, F., Fiedler, S., … Wollbrant, C. (2017). Registered Replication Report: Rand, Greene & Nowak (2012). Perspectives on Psychological Science, 12(3), 527–542

Dorrough, A., Fiedler, S. & Schild, C. (in preparation). Behind the veil of ignorance: Efficiency of masking gender information in hiring processes. (pre-registered)

Fiedler, S. & Hillenbrand, A., (in preparation). How framing guides the decision making process

Fiedler, S., Henninger, F., Glöckner, A. & Hilbig, B., (in preparation). Guiding Your Risk Assessment: Bottom-up processes of Attention

Fiedler, S. & Glöckner, A. (in preparation). Fooling whom out of his money?  Investigating arousal dynamics in the context of betraying a stranger or the experimenter. (pre-registered)

Fiedler, S. (in preparation). Individual Difference Measures in JDM

Fiedler, S. & Rahal, R. (in preparation). Oh Wait, You’re One of Them? Eye-Tracking Evidence on Choice Construction in Intergroup Decisions

Fiedler, S., Schulte-Mecklenbeck, M. , Renkewitz, F. & Orquin, J. (in preparation). Reproducible reporting of eye-tracking results: The i-Guidelines

Fiedler, S. & Weisel, O. (in preparation). Lying behavior under value ambiguity

Fiedler, S. & Ghaffari, M. (submitted). The attractiveness of pro-sociality

Fiedler, S. , Schulte-Mecklenbeck, M. , Renkewitz, F. & Orquin, J. (forthcoming). Standards of eye-tracking. In M. Schulte-Mecklenbeck, A. Kühberger & R. Ranyard (Eds.), Handbook of Process Tracing Methods for Decision Research, 2nd ed. New York, NY: Taylor & Francis

Fiedler, S., Weber, B. & Ettinger, U. (in press). Neuroeconomics. In U. Ettinger & C. Klein (Eds.), Handbook of Eyetracking. New York, NY: Wiley

Fiedler, S., Glöckner, A. (2015). Attention and Moral Behavior. Current Opinion in Psychology, 6, 139–144

Fiedler, S., Glöckner, A., Nicklisch, A. & Dickert, S. 2013. Social Value Orientation and Information Search in Social Dilemmas: An Eye-tracking Analysis. Organizational Behavior and Human Decision Processes, 120(2), 272-284

Fiedler, S. & Glöckner, A (2012). The Dynamics of Decision Making in Risky Choice: An Eye-tracking Analysis. Frontiers in Psychology, 3, 335

Fuchs, H., Jenny, M. & Fiedler, S. (2012). Psychologists are Open to Change, Yet Wary of Rules. Perspectives on Psychological Science, 7, 634–637

Ghaffari, M., Fiedler, S. & von Helversen, B. (submitted). The cost of forgetting: Understanding the link between memory and social preferences. (pre-registered)

Ghaffari, M. & Fiedler, S. (submitted). The power of attention: Using eye gaze to predict other-regarding and moral choices (preregistered)

Glöckner, A., Hilbig, B., Henninger, F.,& Fiedler, S. (2016). The Reversed Description-Experience Gap: Disentangling Sources of Presentation Format Effects in Risky Choice. Journal of Experimental Psychology: General, 145 (4), 486-508.

Glöckner, A., Fiedler, S., Hochman, G., Ayal, S. & Hilbig, B. E.(2012). Processing Differences Between Descriptions and Experience: A Comparative Analysis Using Eye-tracking and Physiological Measures, Frontiers in Psychology, 3, 173

Glöckner, A., Fiedler, S. & Renkewitz, F.(2017). Belastbare und effiziente Wissenschaft: Strategische Ausrichtung von Forschungsprozessen als Weg aus der Replikationskrise. Psychologische Rundschau

Hellmann, M., Fiedler, S. & Glöckner, A. (in preparation). Drivers of Prosocial Behavior: Social and Cultural Distance

Hellmann, M., Fiedler, S., Dorrough, A. & Glöckner, A. (in press). Cross-national In-group Favoritism in Prosocial Behavior: Evidence from Latin and North America. Judgment and Decision Making

Hochmann, G., Glöckner, A., Fiedler, S. & Ayal, S. (2015). I can see it in your eyes: Biased Processing and Increased Arousal in Dishonest Responses. Journal of Behavioral Decision Making, 29, 322–335

Fiedler, S., Hu, Y. & Weber, B. (submitted). What drives the (un)empathic bystander to intervene? Insights from eye-tracking. (pre-registered)

Jekel M., Glöckner, A., Fiedler, S. & Bröder, A. (2012). The Rationality of Different Kinds of Intuitive Decision Processes, Synthese, 189(1), 1–14

Jekel, M., Fiedler, S. & Glöckner, A.(2011). Diagnostic Task Selection for Strategy Classification in Judgment and Decision Making, Judgment and Decision Making, 6(8), 782–799

Kidwell, M. C., Lazarevic, L. B., Baranski, E., Hardwicke, T. E., Piechowski, S., Falkenberg, L-S., Kennett, C., Slowik, A., Sonneleitner, C., Hess-Holden, C., Errington, T. M., Fiedler, S. & Nosek, B. A. (2016). Badges to Acknowledge Open Practices: A simple, Low-cost, Effective Method for Increasing Transparency. PLOS Biology, 138–144

Levin, F., Fiedler, S. & Weber, B. (submitted).The influence of episodic memory decline on value-based choices. (pre-registered)

Open Science Collaboration (2016). Maximizing the reproducibility of your research. In S. O. Lilienfeld & I. D. Waldman (Eds.), Psychological Science Under Scrutiny: Recent Challenges and Proposed Solutions. New York, NY: Wiley

Open Science Collaboration (2015). Estimating the Reproducibility of Psychological Science. Science, 349(6251), 138–144.

Open Science Collaboration. (2012). An Open, Large-scale, Collaborative Effort to Estimate the Reproducibility of Psychological Science. Perspectives on Psychological Science, 7(6), 657–660

Rahal, R., Fiedler, S. & de Dreu C. (submitted). Social Value Orientation Determines Decision Effort in Intergroup Dictator Games: An Eye-Tracking Analysis

Rahal, R., Fiedler, S. & de Dreu C. (submitted). Staying Blind to Stay Fair: Inequality Averse Decision Makers Avoid Group Membership Information and Ingroup Favoritism

Rahal, R., Hoeft, L. & Fiedler, S. (in preparation). Eyes on Morals: Distinguishing Deontological and Utilitarian Decision Processes

Renkewitz, F., Fuchs, H. M. & Fiedler, S. (2011). Is There Evidence of Publication Biases in JDM Research?, Judgment and Decision Making, 6(8), 870–881

Rittich, J. , Fiedler, S. & Schultze, T. (in preparation). Attentional Processes of Advice Taking (pre-registered)

Schulte-Mecklenbeck, M. & Fiedler, S. (in preparation). Gambling with Emotions: Understanding Emotions via Facial Recognition in Risky Choices