Suchergebnisse

"The Availability Heuristic, Political Leaders, and Decision Making" published on by Oxford University Press.

AbstractThis study tends to examine the moderated mediation role of external locus of control (ELC) and risk tolerance (RT) in the relationship between heuristic availability bias (HAB) and investment decision‐making (IDM). We used SPSS PROCESS Model 7 (moderated mediation) on a data set gleaned from 385 practicing stock investors at Pakistan Stock Exchange. The results of the study revealed that the relationship between HAB and IDM is partially mediated by RT, whereas, the ELC significantly moderates the relationship between HAB and RT. Moreover, in the case of moderated mediation, the ELC showed a significant moderating role in the relationship of HAB with IDM through RT. Since the findings of the study argue that ELC intensifies the influence of HAB on investors' risk‐taking propensity that inculcate them toward making investment decisions. The practical and theoretical implications of the study are discussed in detail.

"The Role of Analogies in Crisis Decision Making" published on by Oxford University Press.

It is broadly assumed that political elites (e.g. party leaders) regularly rely on heuristics in their judgments or decision-making. In this article, I aim to bring together and discuss the scattered literature on this topic. To address the current conceptual unclarity, I discuss two traditions on heuristics: (1) the heuristics and biases (H&B) tradition pioneered by Kahneman and Tversky and (2) the fast and frugal heuristics (F&F) tradition pioneered by Gigerenzer et al. I propose to concentrate on two well-defined heuristics from the H&B tradition—availability and representativeness—to empirically assess when political elites rely on heuristics and thereby understand better their judgments and decisions. My review of existing studies supports the notion that political elites use the availability heuristic and possibly the representativeness one for making complex decisions under uncertainty. It also reveals that besides this, we still know relatively little about when political elites use which heuristic and with what effect(s). Therefore, I end by proposing an agenda for future research.

AbstractThis research investigates principles of judgmental heuristics and dual processing systems in the online purchasing environment. It examines the effects of availability cues in restaurant reviews on dining intentions and menu item choice. Two experiments are reported in which consumers make dining out and food choice decisions using simulated online review sites. The first experiment evaluates primacy–recency effects of positive and negative reviews along with different review types. The findings indicate that text plus ratings produce higher visit intentions and expectations compared with either cue by itself. The second experiment examines the effects of rating format, visual cues, and review valence on menu item choice. Pictures increase likelihood to choose a positively reviewed menu item but do not influence likelihood to choose a negatively reviewed item. This finding supports the negativity bias, whereby consumers place more weight on negative versus positive information. Consumers are more likely to choose a menu item with pictures when ratings are in numerical versus star rating format. The findings can be interpreted in terms of System 1 (heuristic) and System 2 (systematic) processing.

AbstractFlooding is one of the most significant natural disasters worldwide. Nevertheless, voluntary take‐up of individual damage reduction measures is low. A potential explanation is that flood risk perceptions of individual homeowners are below objective estimates of flood risk, which may imply that they underestimate the flood risk and the damage that can be avoided by damage reduction measures. The aim of this article is to assess possible flood risk misperceptions of floodplain residents in the Netherlands, and to offer insights into factors that are related with under‐ or overestimation of perceived flood risk. We analyzed survey data of 1,848 homeowners in the Dutch river delta and examine how perceptions of flood probability and damage relate to objective risk assessments, such as safety standards of dikes, as well as heuristics, including the availability heuristic and the affect heuristic. Results show that many Dutch floodplain inhabitants significantly overestimate the probability, but underestimate the maximum expected water level of a flood. We further observe that many respondents apply the availability heuristic.

Multi-access Edge Computing (MEC) is gaining momentum as it is considered as one of the enablers of 5G ultra-Reliable Low-Latency Communications (uRLLC) services. MEC deploys computation resources close to the end user, enabling to reduce drastically the end-to-end latency. ETSI has recently leveraged the MEC architecture to run all MEC entities, including MEC applications, as Virtual Network Functions (VNF) in a Network Functions Virtualization (NFV) environment. This evolution allows taking advantage of the mature architecture and the enabling tools of NFV, including the potential to apply a variety of service-tailored function placement algorithms. However, the latter need to be carefully designed in case of MEC applications such as uRLLC, where service access latency is critical. In this paper, we propose a novel placement scheme applicable to a MEC in NFV environment. In particular, we propose a formulation of the problem of VNF placement tailored to uRLLC as an optimization problem of two conflicting objectives, namely minimizing access latency and maximizing service availability. To deal with the complexity of the problem, we propose a Genetic Algorithm to solve it, which we compare with a CPLEX implementation of our model. Our numerical results show that our heuristic algorithm runs efficiently and produces solutions that approximate well the optimal, reducing latency and providing a highly-available service. ; This work has been partially supported by the European Union's H2020 5G-Transformer Project (grant no. 761536)

In this article, we set ourselves a task to test institutional memory hypothesis as a core of endogenous credit cycles. According to this hypothesis, risks taken by creditors depend largely on availability heuristic and experience of loan officers. To assess validity of this hypothesis we construct and estimate a simple VAR model. The data for this model is acquired from results of an experimental study (lasted for 70 rounds), the purpose of which is to identify behavioral patterns of participants while meeting demand for credit, specifics of subjectively weighted assessment of credit risk, based on shock approach. The results of the study allow confirming institutional memory hypothesis. After initial shock of bad debts, number of periods to recover willingness to accept risk has increased by 39%, which supports the hypothesis of availability heuristic?s influence. However, with improvement of loan portfolio?s quality, willingness to take risk is restoring. In addition, we managed to confirm existence of risk?s underestimation and overestimation periods in an experimental manner.

This paper develops a theory that explains why financial crises follow profitable lending booms. When agents exhibit the "availability heuristic" and there is a long period of banking profitability, all agents—banks, their investors, and regulators—end up in an "availability cascade," overestimating bankers' risk-management skills and underestimating the probability that observed outcomes are due to good luck. Consequently, banks profitably invest in riskier assets. Subsequently, if a public signal reveals that outcomes are luck-driven, investors withdraw funds, liquidity evaporates, and a crisis ensues. A loan resale market improves liquidity but increases the probability of a crisis.

It is broadly assumed that political elites (e.g. party leaders) regularly rely on heuristics in their judgments or decision-making. In this article, I aim to bring together and discuss the scattered literature on this topic. To address the current conceptual unclarity, I discuss two traditions on heuristics: (1) the heuristics and biases (H&B) tradition pioneered by Kahneman and Tversky and (2) the fast and frugal heuristics (F&F) tradition pioneered by Gigerenzer et al. I propose to concentrate on two well-defined heuristics from the H&B tradition—availability and representativeness—to empirically assess when political elites rely on heuristics and thereby understand better their judgments and decisions. My review of existing studies supports the notion that political elites use the availability heuristic and possibly the representativeness one for making complex decisions under uncertainty. It also reveals that besides this, we still know relatively little about when political elites use which heuristic and with what effect(s). Therefore, I end by proposing an agenda for future research.

It is broadly assumed that political elites (e.g. party leaders) regularly rely on heuristics in their judgments or decision-making. In this article, I aim to bring together and discuss the scattered literature on this topic. To address the current conceptual unclarity, I discuss two traditions on heuristics: (1) the heuristics and biases (H&B) tradition pioneered by Kahneman and Tversky and (2) the fast and frugal heuristics (F&F) tradition pioneered by Gigerenzer et al. I propose to concentrate on two well-defined heuristics from the H&B tradition— availability and representativeness—to empirically assess when political elites rely on heuristics and thereby understand better their judgments and decisions. My review of existing studies supports the notion that political elites use the availability heuristic and possibly the representativeness one for making complex decisions under uncertainty. It also reveals that besides this, we still know relatively little about when political elites use which heuristic and with what effect(s). Therefore, I end by proposing an agenda for future research.

There is a growing trend of information sharing within modern supply chains. This trend is mainly stimulated by recent developments in information technology and the increasing awareness that accurate and timely information helps firms cope with volatile and uncertain business conditions. We model a periodic-review, single-item, capacitated stochastic inventory system, where a supply chain member has the ability to obtain advance capacity information ('ACI') about future supply capacity availability. ACI is used to reduce the uncertainty of future supply and thus enables the decision-maker to make better ordering decisions. We develop an easily applicable heuristic based on insights gained from an analysis of the optimal policy. In a numerical study we quantify the benefits of ACI and compare the performance of the proposed heuristic with the optimal performance. We illustrate the conditions in which the procedure is working well and comment on its practical applicability. ; V sodobnih oskrbnih verigah je v zadnjih dveh desetletjih močno prisoten trend izmenjave informacij, ki omogočajo izboljša­nje poslovanja posameznih podjetij, kot tudi celotne oskrbne verige. S pomočjo natančnih in pravočasnih informacij, katerih prenos je z nedavnim razvojem informacijskih tehnologij močno olajšan, se podjetja uspešno spopadajo s spremenljivimi in negotovimi pogoji poslovanja. V članku predstavimo model uravnavanja zalog s periodičnim spremljanjem zalog v pogojih nee­nakomernega stohastičnega povpraševanja z omejeno zmogljivostjo oskrbe, kjer ima člen oskrbne verige dostop do informa­cije o razpoložljivosti oskrbe. Informacija o razpoložljivosti oskrbe zmanjša negotovost prihodnje oskrbe in omogoči managerju učinkovitejše naročanje. Na podlagi glavnih vpogledov pridobljenih z analizo optimalne politike naročanja razvijemo praktično uporabno hevristično metodo. Z numerično analizo določimo vrednost informacije o razpoložljivosti oskrbe in prepoznamo scenarije, kjer je ta največja. Ob tem na podlagi primerjave med rezultati optimalne politike naročanja in predlagane hevristike izmerimo natančnost le-te in podamo pogoje, ki morajo biti izpolnjeni, da hevristika doseže želeno natančnost.