Ignoring information in binary choice with continuous variables: When is less 'more'?
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- dc.contributor.author Hogarth, Robin M.ca
- dc.contributor.author Karelaia, Nataliaca
- 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.date.modified 2017-07-23T02:08:27Z
- 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/pdfca
- 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.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.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- 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.title Ignoring information in binary choice with continuous variables: When is less 'more'?ca
- dc.type info:eu-repo/semantics/workingPaper