Auctions, normally considered as devices facilitating trade, also provide a way to probe mechanisms governing one’s valuation of some good or action. One of the most intriguing phenomena in auction behavior is the winner’s curse — the strong tendency of participants to bid more than rational agent theory prescribes, often at a significant loss. The prevailing explanation suggests that humans have limited cognitive abilities that make estimating the correct bid difficult, if not impossible. Using a series of auction structures, we found that bidding approaches rational agent predictions when participants compete against a computer. However, the winner’s curse appears when participants compete against other humans, even when cognitive demands for the correct bidding strategy are removed. These results suggest the humans assign significant future value to victories over human but not over computer opponents even though such victories may incur immediate losses, and that this valuation anomaly is the origin of apparently irrational behavior.

This paper examines how observing other people’s behavior affects risk taking in repeated decision tasks. In Study 1, 100 participants performed experience-based decision tasks either alone or in pairs, with the two members being exposed to each others’ choices and outcomes. The tasks involved either equiprobable gains and losses or frequent small gains and rare large losses. The results indicated that, in both risk types, the social exposure increased the proportion of risky selection, but its effect was stronger in the rare-loss condition. In Study 2 the rare-loss task was administered to 32 study participants, with a target individual observing the choices of a paired individual. The results showed that observing others, rather than being observed, led to the pattern of increased risk taking. The findings of the two studies indicate the importance of distinguishing different types of risky situations and shed light on contradictory findings in the literature.

Researchers know very little about how people choose mates. To remedy this, the present study examined the influence of number of potential mates and mate-standard strength on single women’s choice satisfaction and strategy use. Single women chose one potential partner from a set of 4, 24, or 64 options presented on a real dating website. Participants adjusted to an increasing number of options by changing their decision-making strategies, such that they relied on noncompensatory, attribute-based strategies as the number of options increased. Across conditions they reported similar levels of satisfaction with the choice process and the person selected. Mate-standard strength qualified some of the results, however, as women with higher mate standards preferred extensive choice, and they tended to prefer compensatory choice strategies and were more satisfied with the option selected when he was selected from among many.

The present study investigates the effect of framing and legal role on the propensity to accept a settlement offer by litigants in a simulated legal dispute. Participants were given four different scenarios that factorially combined legal role (plaintiff vs. defendant) and frame (positive vs. negative). The results indicated that positively framed litigants were more willing to settle than negatively framed litigants independently of legal role. These results were replicated in a second experiment that also asked participants to state their subjective probability of winning. This revealed that the propensity to settle was a joint function of frame and the perceived chance of winning. In contrast to previous research, no systematic effect of legal role was found. It is concluded that the rate of negotiated settlements of legal disputes may be increased by manipulating both of these factors.

Recent research reported evidence that contradicts cumulative prospect theory and the priority heuristic. The same body of research also violates two editing principles of original prospect theory: cancellation (the principle that people delete any attribute that is the same in both alternatives before deciding between them) and combination (the principle that people combine branches leading to the same consequence by adding their probabilities). This study was designed to replicate previous results and to test whether the violations of cumulative prospect theory might be eliminated or reduced by using formats for presentation of risky gambles in which cancellation and combination could be facilitated visually. Contrary to the idea that decision behavior contradicting cumulative prospect theory and the priority heuristic would be altered by use of these formats, however, data with two new graphical formats as well as fresh replication data continued to show the patterns of evidence that violate cumulative prospect theory, the priority heuristic, and the editing principles of combination and cancellation. Systematic violations of restricted branch independence also contradicted predictions of “stripped” prospect theory (subjectively weighted additive utility without the editing rules).

Using Brunswik’s (1952) lens model framework, Hammond (1965) proposed interpersonal conflict theory to explain the nature, source, and resolution of disagreement or “cognitive conflict” between parties performing judgment tasks. An early review by Brehmer (1976) highlighted the potential of this approach in, for example, understanding the structure of cognitive conflicts, and the effect of task and person variables on judgment policy change and conflict resolution. However, our bibliographic and content reviews from 1976 to the present day demonstrate that research on cognitive conflict using the lens model has declined sharply, while research on “task conflict” has grown dramatically. There has also been a shift to less theoretical precision and methodological rigor. We discuss possible reasons for these developments, and suggest ways in which lens model research on cognitive conflict can be revitalized by borrowing from recent theoretical and methodological advances in the field of judgment and decision making.

In this article a broad perspective incorporating elements of time series theory is presented for conceptualizing the data obtained in multi-trial judgment experiments. Recent evidence suggests that sequential context effects, assimilation and contrast, commonly found in psychophysical judgment tasks, may be present in judgments of abstract magnitudes. A time series approach for analyzing single-subject data is developed and applied to expert prognostic judgments of risk for heart disease with an emphasis on detecting possible sequential context effects. The results demonstrate that sequential context effects do exist in such expert prognostic judgments. Contrast and assimilation were produced by cue series; the latter occurring more frequently. Experts also showed assimilation of prior responses that was independent of the cue series input. Time series analysis also revealed that abrupt or large trial-by-trial changes in the value of cues that receive the most attention in prognostic judgment tasks can disrupt the accuracy of these judgments. These findings suggest that a time series approach is a useful alternative to ordinary least squares regression, providing additional insights into the cognitive processes operating during multi-cue judgment experiments.