Accounting 795

Business Research in Judgment and Decision Making

Fall 1996

Robert J. Ramsay , Ph.D., CPA Office: 7-3702 RJRAMS2@POP.UKY.EDU Home: 268-7718

Text: Hogarth, Robin. 1988. Judgement and Choice. 2d Ed. John Wiley & Sons: New York.

Optional reading:

Arkes, H. and K. R. Hammond. 1986. Judgment and Decision Making: An interdisciplinary reader. Cambridge University Press: New York.

Johnson-Laird, P. N. and E. Shafir. 1993. Blackwell: Cambridge, MA.

Loke, W. H. 1996. Perspectives on Judgment and Decision Making. The Scarecrow Press, Inc.: Lanham, MD.

Payne, J. W., J. R. Bettman, and E. J. Johnson. 1993. The Adaptive Decision Maker. Cambridge University Press: New York.

Plous, S. 1993. The Psychology of Judgment and Decision Making. McGraw Hill: New York.

Trotman, K. 1996. Research Methods for Judgment and Decision Making Studies in Auditing. Coopers & Lybrand: Melbourne.

This course will provide students with theories from cognitive psychology regarding human judgment and decision making and will examine research in all areas of business as well as in other professions that make use of these theories. There will be two essay-type exams-a mid-term and final. Students will also be required to present and discuss research papers making use of the theories discussed in class. Finally, students will prepare and present a research proposal using one of the theories discussed in class to examine an important question in their respective areas. Participation in class discussions by all students is an important part of the learning process and will comprise a significant part of student grades.

Grading

Mid-term exam: 15%.

Final exam: 20%

Research paper: 25%

In class presentations 20%

Class participation 20%

Total 100%.

The Mid-term and final exams will be take-home exams. The research paper should propose a research project that applies one or more of the theories discussed in class to a research topic in the student's area. It should consist of a definition of the research question, a statement of why the question is important, a literature review and hypothesis development, a discussion of the methodology to be used, and the limitations and research implications of the proposed study.

SCHEDULE

8/29-The nature of human judgment. Chap. 1; Readings 22, 24

9/5- Randomness and the probabilistic environment. Combining information for prediction.

Chap. 2&3, appendix 1; Readings 18, 30, 53

9/12-Combining information for evaluation and choice. Belief adjustment model. Chapter 4; Reading 104, 12, 43.

9/19- Expertise.

1, 20, 88, 89.

9/26- Choice under uncertainty. Prospect Theory. The Theory of Signal Detection.

Chapter 5, 98,103, 107

10/3-Ambiguity.

29, 111, 115

10/10-Mid-term exam.

10/17-Learning relations, Memory

Chapters 6 & 7, 73, Cox Paper

10/24- Hindsight bias and Confidence

Lipe paper, 17, 57, 95

10/31- Decision aids.

Chapter 9, McVay paper, 79, 101

11/7- Group Decisions

38, 54, 76, 94

11/14- Methodology issues

14, 21, 37, 45

11/21- Summary

Sprinkle & Tubbs paper, 5, 72

12/5-Student presentations.

12/12- Student presentations.

READING LIST

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  3. Anderson, J. R. 1982. Acquisition of cognitive skill. Psychological Review. 89 (4): 369-406.
  4. _____ 1983. A spreading activation theory of memory. Journal of Verbal Learning and Verbal Behavior. 22: 261-295.
  5. Anderson, N. H. 1986. A cognitive theory of judgment and decision. In B. Brehmen, H. Jungermann, P. Lourens & G. Sevon (Eds.) New Directions in Research on Decision Making. Amsterdam: Elsevier.
  6. Anderson, U., & W. F. Wright 1988. Expertise and the explanation effect. Organization Behavior and Human Decision Processes. 13: 431-446.
  7. Arkes, H. R. 1991. Costs and benefits of judgment errors: Implications for debiasing. Psychological Bulletin. 110: 486-498.
  8. _____, & M. R. Freedman. 1984. A demonstration of the costs and benefits of expertise in recognition memory. Memory and Cognition. 12 (1): 84-89.
  9. _____, and C. Blumer. 1985. The psychology of sunk cost. Organizational Behavior and Human Decision Processes. 124-140.
  10. _____, R. M. Dawes, & C. Christensen. 1986. Factors influencing the use of a decision rule in a probabilistic task. Organizational Behavior and Human Decision Processes. (February): 93-110.
  11. Balzer, W.K., L. B. Hamer, K. E. Sumner, T. R. Birchenough, S. P Martens, & P. H. Raymark. 1994. Effects of cognitive feedback components, display format, and elaboration on performance. Organizational Behavior and Human Decision Processes. 58 (3): 369-385.
  12. Bamber, E. M., R. J. Ramsay, and R. M. Tubbs. 1996. An examination of the descriptive validity of the belief-adjustment model and alternative attitudes to evidence in auditing. Accounting, Organizations, and Society. Forthcoming.
  13. Bettman, J.R., & Sujan. 1987. Effects of framing on evaluation of comparable and noncomparable alternatives by expert and novice consumers. Journal of Consumer Research. 14: 141-154.
  14. Biggs, S. F., A. J. Rosman & G. K. Sergenian. 1993. Methodological issues in judgment and decision-making research: Concurrent verbal protocol validity and simultaneous traces of process. Journal of Behavioral Decision Making. 6:: 187-206.
  15. Birnbaum, M.H. 1983. Base rates in Bayesian inference: Signal detection analysis of the cab problem. American Journal of Psychology. 96: 85-94.
  16. Brehmer, B. 1992. Dynamic decision making: Human control of complex systems. Acta Psychologica. 81: 211-241.
  17. Brenner, L. A., K.J. Koehler, and A. Tversky, 1996. Overconfidence in probability and frequency judgments: A critical examination. Organizational Behavior and Human Decision Processes. 65 (3): 212.
  18. Carlson, B.W. 1993. The accuracy of future forecasts and past judgements. . Organizational Behavior and Human Decision Processes.54 (2): 245-277.
  19. Chalos, P., & S. Pickard. 1985 Information choice and cue use: An experiment in group information processing. Journal of Applied Psychology. 70: 634-641.
  20. Chi, M. T. H., R. Glaser, and E. Rees. 1982. Expertise in problem solving. In R.J. Sternberg (Ed.) Advances in the Psychology of Human Intelligence. Vol. 1., Hillsdale, MJ. Lawrence Erlbaum Associates: 7-75.
  21. Cook, R. L. and T. R. Stewart. 1975. A comparison of seven methods for obtaining subjective descriptions of judgmental policy. Organizational Behavior and Human Performance. (February): 31-45.
  22. Cooksey, R.W., Freebody, P., & Davidson, G.R.(1986). Social Judgment Theory: Teacher expectations concerning children's early reading potential." In Judgment and Decision Making, An interdisciplinary reader. H Arkes and K Hammond eds. Cambridge University Press: New York.
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  29. _____. & _____. 1985. Ambiguity and uncertainty in probabilistic inference.

Psychological Review. 92: 433-461.

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