The Adaptive Decision Maker

Introduction

By now, our basic premise is apparent: Individuals display a great deal of flexibility in making decisions. In their highly influential review of behavioral decision theory, Einhorn and Hogarth (1981) noted that “the most important empirical results in the period under review have shown the sensitivity of judgment and choice to seemingly minor changes in tasks” (p. 61). More than a decade of research since Einhorn and Hogarth's review has strongly reaffirmed that information processing in decision making, as in other areas of cognition, is highly contingent on the demands of the task. The same individual will use many different kinds of strategies in making a decision, contingent upon such factors as how information is displayed, the nature of the response, and the complexity of the problem. This chapter has two purposes. First, we briefly define a number of decision strategies that have been proposed to describe judgment and choice. Second, we review the research showing the impact of different task and context variables on the use of decision strategies by an individual.

Before we review the literature, several aspects of our point of view need to be made explicit. First, in order to keep the scope of the chapter manageable, we focus on preferential decisions; inferences and forecasts receive much more limited attention. Preferential decision problems are typically described using three basic components: (1) the alternatives available to the decision maker; (2) events or contingencies that relate actions to outcomes, as well as the associated probabilities of those events; and (3) the values associated with the outcomes.