Overconfidence and confirmation bias: are future managers vulnerable?

Decision makers often use ‘rules of thumb’, or heuristics, to help them handling decision situations (Kahneman and Tversky, 1979b). Those cognitive shortcuts are taken by the brain to cope with complexity and time limitation of decisions, by reducing the burden of information processing (Hodgkinson et al, 1999; Newell and Simon, 1972). Although crucial for decision-making, heuristics come at the cost of occasionally sending us off course, that is, make us fall into judgment traps (Tversky and Kahneman, 1974). Over fifty years of psychological research has shown that heuristics can lead to systematic errors, or biases, in decision-making. This study focuses on two particularly impactful biases to decision-making – the overconfidence and confirmation biases. A specific group – top management school students and recent graduates - were subject to classic experiments to measure their level of susceptibility to those biases. This population is bound to take decision positions at companies, and eventually make decisions that will impact not only their companies but society at large. The results show that this population is strongly biased by overconfidence, but less so to the confirmation bias. No significant relationship between the level of susceptibility to the overconfidence and to the confirmation bias was found.

Confirmation bias in witness interviewing: Can interviewers ignore their preconceptions?

Basic research on expectancy effects suggests that investigative interviewers with pre-conceived notions about a crime may negatively influence the interview process in meaningful ways, yet many interviewing protocols recommend that interviewers review all available information prior to conducting their interviews. Previous research suggests that interviewers with no pre-interview knowledge elicit more detailed and accurate accounts than their informed counterparts (Cantlon, et al., 1996; Rivard et al., under review). The current study investigated whether (a) the benefit of blind versus informed interviewing is moderated by cautionary interviewer instructions to avoid suggestive questions and (b) whether any possible effects of pre-interview information extend beyond the immediate context of the forensic interview. ^ Paired participants (N = 584) were assigned randomly either to the role of interviewer or witness. Witnesses viewed a mock crime video and were interviewed one week later by an interviewer who received either correct, incorrect, or no information about the crime event. Half of the interviewers were assigned randomly to receive additional instructions to avoid suggestive questions. All participants returned 1 week after the interview to recall the crime video (for the witness) or the information recalled by the witness during the interview (for the interviewer). All interviews and delayed recall measures were scored for the quantity and accuracy of information reported. ^ Results replicate earlier findings that blind interviewers elicit more information from witnesses, without a decrease in accuracy rate. However instructions to avoid suggestive questions did not moderate the effect of blind versus informed interviewing on witness recall during the interview. Results further demonstrate that the effects of blind versus non-blind interviewing may extend beyond the immediate context of the interview to a later recall attempt. With instructions to avoid suggestive questions, witnesses of blind interviewers were more accurate than witnesses of incorrectly informed interviewers when recalling the event 1 week later. In addition, blind interviewers had more accurate memories for the witnesses' account of the event during the interview compared to non-blind interviewers.^

Tumor architecture exerts no bias on nuclear grading in breast cancer diagnosis.

We recently reported that nuclear grading in prostate cancer is subject to a strong confirmation bias induced by the tumor architecture. We now wondered whether a similar bias governs nuclear grading in breast carcinoma. An unannounced test was performed at a pathology conference. Pathologists were asked to grade nuclei in a PowerPoint presentation. Circular high power fields of 27 invasive ductal carcinomas were shown, superimposed over low power background images of either tubule-rich or tubule-poor carcinomas. We found (a) that diagnostic reproducibility of nuclear grades was poor to moderate (weighed kappa values between 0.07 and 0.54, 27 cases, 44 graders), but (b) that nuclear grades were not affected by the tumor architecture. We speculate that the categorized grading in breast cancer, separating tubule formation, nuclear pleomorphism, and mitotic figure counts in a combined three tier score, prevents the bias that architecture exerts on nuclear grades in less well-controlled situations.

Tumor architecture exerts no bias on nuclear grading in breast cancer diagnosis

We recently reported that nuclear grading in prostate cancer is subject to a strong confirmation bias induced by the tumor architecture. We now wondered whether a similar bias governs nuclear grading in breast carcinoma. An unannounced test was performed at a pathology conference. Pathologists were asked to grade nuclei in a PowerPoint presentation. Circular high power fields of 27 invasive ductal carcinomas were shown, superimposed over low power background images of either tubule-rich or tubule-poor carcinomas. We found (a) that diagnostic reproducibility of nuclear grades was poor to moderate (weighed kappa values between 0.07 and 0.54, 27 cases, 44 graders), but (b) that nuclear grades were not affected by the tumor architecture. We speculate that the categorized grading in breast cancer, separating tubule formation, nuclear pleomorphism, and mitotic figure counts in a combined three tier score, prevents the bias that architecture exerts on nuclear grades in less well-controlled situations.

La disonancia cognitiva y trampa de la memoria en decisiones de Inversión: caso colombiano

Este documento es el resultado de una investigación bajo el enfoque de Finanzas Corporativas del Comportamiento, disciplina relevante en el mundo financiero desde el 2002 y que hasta el momento poco se ha investigado en Colombia. Esta difiere del supuesto tradicional de la racionalidad de los individuos en la toma de decisiones financieras, ya que pueden ser influenciadas por sesgos cognitivos y emocionales que la teoría ortodoxa no tiene en cuenta en sus supuestos. Esta investigación busca indagar, desde el punto de vista conceptual y mediante el análisis de resultados de estudio de campo con operadores del mercado bursátil colombiano, sobre la posible presencia de elementos comportamentales en las decisiones de inversión. Los sesgos que se evaluaron fueron: disonancia cognitiva, heurístico de disponibilidad y sesgo de confirmación. Para la recolección de fuentes primarias, una encuesta fue enviada a los operadores Colombianos, categorizados en operadores con experiencia y operadores jóvenes. Después del filtro, 142 encuestas fueron seleccionadas para el análisis. Los principales hallazgos fueron que los jóvenes son más propensos a experimentar disonancia cognitiva y heurístico de disponibilidad y en ambas categorías, los sesgos analizados influencian medianamente la toma de decisiones de inversión.

Análise sobre a influência da personalidade e dos vieses comportamentais nos hábitos de investimento dos indivíduos

Com base nos estudos sobre finanças comportamentais, esta dissertação tem como objetivo verificar se o estilo cognitivo do indivíduo e seus respectivos vieses comportamentais exercem influência em seus hábitos de investimento como, por exemplo, sua decisão em investir em renda fixa ou renda variável. Uma survey foi realizada com os alunos de pós-graduação de 5 faculdades da cidade de São Paulo. O método foi escolhido por melhor se ajustar ao objetivo do trabalho. Foram analisados quatro tipos de perfis psicológicos, que se diferenciam, entre outras características, por possuírem maior ou menor tolerância ao risco. Foram examinados também dezoito vieses comportamentais entre eles: excesso de confiança, representatividade, aversão à perda e conta mental. Os resultados mostram evidências de que a personalidade pode exercer influência sobre a decisão do indivíduo em investir em renda fixa ou renda variável. Verificou-se também que os vieses confirmação e otimismo sinalizam uma possível influência na decisão dos indivíduos em investir em renda variável.

How Preliminary Are Preliminary Decisions?

The present research focuses on the question of whether even a preliminary decision causes a confirmation bias in order to maintain the status quo and examines individual differences in consistency between the preliminary and final decision and biased information processing. Dispositional Need for Closure (NFC, Webster & Kruglanski, 1994) was expected to predict revision or maintenance of the preliminary decision (decision consistency) after additional information on the issue was searched for and evaluated. Participants higher on dispositional NFC were less likely to change their preliminary decision than participants lower on dispositional NFC. Furthermore, the effect of NFC on decision consistency was fully mediated by biased information evaluation following the preliminary decision.

FINDING FOSSIL GROUPS: OPTICAL IDENTIFICATION AND X-RAY CONFIRMATION

We report the discovery of 12 new fossil groups (FGs) of galaxies, systems dominated by a single giant elliptical galaxy and cluster-scale gravitational potential, but lacking the population of bright galaxies typically seen in galaxy clusters. These FGs, selected from the maxBCG optical cluster catalog, were detected in snapshot observations with the Chandra X-ray Observatory. We detail the highly successful selection method, with an 80% success rate in identifying 12 FGs from our target sample of 15 candidates. For 11 of the systems, we determine the X-ray luminosity, temperature, and hydrostatic mass, which do not deviate significantly from expectations for normal systems, spanning a range typical of rich groups and poor clusters of galaxies. A small number of detected FGs are morphologically irregular, possibly due to past mergers, interaction of the intra-group medium with a central active galactic nucleus (AGN), or superposition of multiple massive halos. Two-thirds of the X-ray-detected FGs exhibit X-ray emission associated with the central brightest cluster galaxy (BCG), although we are unable to distinguish between AGN and extended thermal galaxy emission using the current data. This sample representing a large increase in the number of known FGs, will be invaluable for future planned observations to determine FG temperature, gas density, metal abundance, and mass distributions, and to compare to normal (non-fossil) systems. Finally, the presence of a population of galaxy-poor systems may bias mass function determinations that measure richness from galaxy counts. When used to constrain power spectrum normalization and Omega(m), these biased mass functions may in turn bias these results.

Hubble parameter reconstruction from a principal component analysis: minimizing the bias

Aims. A model-independent reconstruction of the cosmic expansion rate is essential to a robust analysis of cosmological observations. Our goal is to demonstrate that current data are able to provide reasonable constraints on the behavior of the Hubble parameter with redshift, independently of any cosmological model or underlying gravity theory. Methods. Using type Ia supernova data, we show that it is possible to analytically calculate the Fisher matrix components in a Hubble parameter analysis without assumptions about the energy content of the Universe. We used a principal component analysis to reconstruct the Hubble parameter as a linear combination of the Fisher matrix eigenvectors (principal components). To suppress the bias introduced by the high redshift behavior of the components, we considered the value of the Hubble parameter at high redshift as a free parameter. We first tested our procedure using a mock sample of type Ia supernova observations, we then applied it to the real data compiled by the Sloan Digital Sky Survey (SDSS) group. Results. In the mock sample analysis, we demonstrate that it is possible to drastically suppress the bias introduced by the high redshift behavior of the principal components. Applying our procedure to the real data, we show that it allows us to determine the behavior of the Hubble parameter with reasonable uncertainty, without introducing any ad-hoc parameterizations. Beyond that, our reconstruction agrees with completely independent measurements of the Hubble parameter obtained from red-envelope galaxies.

Experimental studies of di-jet survival and surface emission bias in Au plus Au collisions via angular correlations with respect to back-to-back leading hadrons

We report first results from an analysis based on a new multi-hadron correlation technique, exploring jet-medium interactions and di-jet surface emission bias at the BNL Relativistic Heavy Ion Collider (RHIC). Pairs of back-to-back high-transverse-momentum hadrons are used for triggers to study associated hadron distributions. In contrast with two-and three-particle correlations with a single trigger with similar kinematic selections, the associated hadron distribution of both trigger sides reveals no modification in either relative pseudorapidity Delta eta or relative azimuthal angle Delta phi from d + Au to central Au + Au collisions. We determine associated hadron yields and spectra as well as production rates for such correlated back-to-back triggers to gain additional insights on medium properties.

Low-bias negative differential resistance in graphene nanoribbon superlattices

We theoretically investigate negative differential resistance (NDR) for ballistic transport in semiconducting armchair graphene nanoribbon (aGNR) superlattices (5 to 20 barriers) at low bias voltages V(SD) < 500 mV. We combine the graphene Dirac Hamiltonian with the Landauer-Buttiker formalism to calculate the current I(SD) through the system. We find three distinct transport regimes in which NDR occurs: (i) a ""classical"" regime for wide layers, through which the transport across band gaps is strongly suppressed, leading to alternating regions of nearly unity and zero transmission probabilities as a function of V(SD) due to crossing of band gaps from different layers; (ii) a quantum regime dominated by superlattice miniband conduction, with current suppression arising from the misalignment of miniband states with increasing V(SD); and (iii) a Wannier-Stark ladder regime with current peaks occurring at the crossings of Wannier-Stark rungs from distinct ladders. We observe NDR at voltage biases as low as 10 mV with a high current density, making the aGNR superlattices attractive for device applications.

Universal zero-bias conductance through a quantum wire side-coupled to a quantum dot

A numerical renormalization-group study of the conductance through a quantum wire containing noninteracting electrons side-coupled to a quantum dot is reported. The temperature and the dot-energy dependence of the conductance are examined in the light of a recently derived linear mapping between the temperature-dependent conductance and the universal function describing the conductance for the symmetric Anderson model of a quantum wire with an embedded quantum dot. Two conduction paths, one traversing the wire, the other a bypass through the quantum dot, are identified. A gate potential applied to the quantum wire is shown to control the current through the bypass. When the potential favors transport through the wire, the conductance in the Kondo regime rises from nearly zero at low temperatures to nearly ballistic at high temperatures. When it favors the dot, the pattern is reversed: the conductance decays from nearly ballistic to nearly zero. When comparable currents flow through the two channels, the conductance is nearly temperature independent in the Kondo regime, and Fano antiresonances in the fixed-temperature plots of the conductance as a function of the dot-energy signal interference between them. Throughout the Kondo regime and, at low temperatures, even in the mixed-valence regime, the numerical data are in excellent agreement with the universal mapping.

Universal zero-bias conductance for the single-electron transistor

The thermal dependence of the zero-bias conductance for the single electron transistor is the target of two independent renormalization-group approaches, both based on the spin-degenerate Anderson impurity model. The first approach, an analytical derivation, maps the Kondo-regime conductance onto the universal conductance function for the particle-hole symmetric model. Linear, the mapping is parametrized by the Kondo temperature and the charge in the Kondo cloud. The second approach, a numerical renormalization-group computation of the conductance as a function the temperature and applied gate voltages offers a comprehensive view of zero-bias charge transport through the device. The first approach is exact in the Kondo regime; the second, essentially exact throughout the parametric space of the model. For illustrative purposes, conductance curves resulting from the two approaches are compared.

Short Cognitive Performance Test: Diagnostic Accuracy and Education Bias in Older Brazilian Adults

The ""Short Cognitive Performance Test"" (Syndrom Kurztest, SKT) is a cognitive screening battery designed to detect memory and attention deficits. The aim of this study was to evaluate the diagnostic accuracy of the SKT as a screening tool for mild cognitive impairment (MCI) and dementia. A total of 46 patients with Alzheimer`s disease (AD), 82 with MCI, and 56 healthy controls were included in the study. Patients and controls were allocated into two groups according to educational level (< 8 years or > 8 years). ROC analyses suggested that the SKT adequately discriminates AD from non-demented subjects (MCI and controls), irrespective of the education group. The test had good sensitivity to discriminate MCI from unimpaired controls in the sub-sample of individuals with more than 8 years of schooling. Our findings suggest that the SKT is a good screening test for cognitive impairment and dementia. However, test results must be interpreted with caution when administered to less-educated individuals.