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Ignoring information in binary choice with continuous variables: When is less 'more'?

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dc.contributor.author Hogarth, Robin
dc.contributor.author Karelaia, Natalia
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.accessioned 2017-07-26T10:50:48Z
dc.date.available 2017-07-26T10:50:48Z
dc.date.issued 2004-02-01
dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=742
dc.identifier.citation Journal of Mathematical Psychology, 49, pp. 115-124, 2005
dc.identifier.uri http://hdl.handle.net/10230/1175
dc.description.abstract When can a single variable be more accurate in binary choice than multiple sources of information? We derive analytically the probability that a single variable (SV) will correctly predict one of two choices when both criterion and predictor are continuous variables. We further provide analogous derivations for multiple regression (MR) and equal weighting (EW) and specify the conditions under which the models differ in expected predictive ability. Key factors include variability in cue validities, intercorrelation between predictors, and the ratio of predictors to observations in MR. Theory and simulations are used to illustrate the differential effects of these factors. Results directly address why and when one-reason decision making can be more effective than analyses that use more information. We thus provide analytical backing to intriguing empirical results that, to date, have lacked theoretical justification. There are predictable conditions for which one should expect less to be more.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 742
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Ignoring information in binary choice with continuous variables: When is less 'more'?
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2017-07-23T02:08:27Z
dc.subject.keyword decision making
dc.subject.keyword bounded rationality
dc.subject.keyword lexicographic rules
dc.subject.keyword choice theory
dc.subject.keyword leex
dc.subject.keyword Management and Organization Studies
dc.rights.accessRights info:eu-repo/semantics/openAccess

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