Bsagent penn
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Transcript of Bsagent penn
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Expressing Preferences in a Principal-Agent Task:
A Comparison of Choice, Matching and Rating
Joel Huber
Dan Ariely
Greg Fischer
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Research Overview
C h o ice am on g trip les R atin g in d ivid u a l O p tion s
E s tim ate P artworts
A ssess B iases in E s tim ated vs . Tru e
M atch in g P a irs
A g en ts learn va lu es
Targ e t P artworth s
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Choice Learning Task
Relative importance of shift from Poor -----> Fair -----> Good
Total cost ($900-$600-$300)
Ski slope quality (C-70, B-80, A-90)
Likelihood of Excellent Snow (50%,70%,90%)
Travel time (6-4-2 hours)
Night Life (poor, fair, good)
Training exercise: Which one would you choose?
A BTotal Cost ($900-$600-$300) $300 $900
Ski slope quality (C-70, B-80, A-90) 70 90
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Theoretical Framework Effort -- Accuracy Tradeoff
• Tasks focus attention on certain features
• Tasks direct the framing of the judgment
• Tasks requiring greater effort result in greater simplification
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How Biases are Manifested
• Attribute focus:– More weight on more important attributes
• Level focus:– Negativity: penalize alternatives with low
values on an attribute– Utility Dependence: value difference between
levels drives simplification
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Assume the following target partworths
0
60
Worst Middle Best
Attribute Weight 45%
35%
20%
Price
Slope quality
Snow Probability
Low -endWeight
.80
.50
.20
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0
60
Worst Middle Best
Attribute Weight 45%
35%
20%
Price
Slope quality
Snow Probability
Low-endWeight
.80
.50
.20
Target--------------Attribute Focusing
0
60
Worst Middle Best
Shift in Attribute Weight +22%
-14%
-25%
Price
Slope quality
Snow Probability
Shift in Low -endWeight
0%
0%
0%
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0
60
Worst Middle Best
Attribute Weight 45%
35%
20%
Price
Slope quality
Snow Probability
Low-endWeight
.80
.50
.20
Target--------------Negativity
0
60
Worst Middle Best
Shift inAttribute Weight 0
0
0
Price
Slope quality
Snow Probability
Shift inLow-endWeight
+13%
+40%
+150%
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0
60
Worst Middle Best
Attribute Weight 45%
35%
20%
Price
Slope quality
Snow Probability
Low-endWeight
.80
.50
.20
Target--------------Utility Dependence
0
60
Worst Middle Best
Shift inAttribute Weight 0
0
0
Price
Slope quality
Snow Probability
Shift in Low-endWeight
+10%
0
-50%
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Target Partworths for First Study
Relative importance of shift from Poor -----> Fair -----> Good
Total cost ($900-$600-$300)
Ski slope quality (C-70, B-80, A-90)
Likelihood of Excellent Snow (50%,70%,90%)
Travel time (6-4-2 hours)
Night Life (poor, fair, good)
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Example of a Choice
Which item would you choose? A B C
Total cost ($900-$600-$300) $900 $600 $300 Ski Slope Quality (C-70,B-80,A-90) 90 80 70
Likelihood of Excellent Snow (50%,70%,90%) 90% 70% 50% Travel time (6-4-2 hours) 4-hrs 3-hrs 2-hrs
Night Life (poor, fair, good) poor good fair
Relative importance of shift from Poor -----> Fair -----> Good
Total cost ($900-$600-$300)
Ski slope quality (C-70, B-80, A-90)
Likelihood of Excellent Snow (50%,70%,90%)
Travel time (6-4-2 hours)
Night Life (poor, fair, good)
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Example of a Rating Relative importance of shift from Poor -----> Fair -----> Good
Total cost ($900-$600-$300)
Ski slope quality (C-70, B-80, A-90)
Likelihood of Excellent Snow (50%,70%,90%)
Travel time (6-4-2 hours)
Night Life (poor, fair, good)
Rate the overall value of this ski trip
Total cost ($900-$600-$300) $300Ski Slope Quality (C-70,B-80,A-90) 70
Likelihood of Excellent Snow (50%,70%,90%) 50%Travel time (6-4-2 hours) 2-hrs
Night Life (poor, fair, good) fair
Worst Average Best 1 2 3 4 5 6 7 8 9
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Example of Matching Relative importance of shift from Poor -----> Fair -----> Good
Total cost ($900-$600-$300)
Ski slope quality (C-70, B-80, A-90)
Likelihood of Excellent Snow (50%,70%,90%)
Travel time (6-4-2 hours)
Night Life (poor, fair, good)
Indicate the cost that would make these two trips equally valuableA B
Total cost ($900-$600-$300) ? $300Ski Slope Quality (C-70,B-80,A-90) 90 70
Likelihood of Excellent Snow (50%,70%,90%) 90% 50%Travel time (6-4-2 hours) 4-hrs 2-hrs
Night Life (poor, fair, good) poor fair
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Hypotheses--Choice
• Greatest quantity of information--least precise outcome required
• Attribute focus:– Prominence effect: increases focus on the most
important attributes
• Level focus:– Negativity: screen out low values– Utility dependence: collapse small differences
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Hypotheses--Rating
• Simplest task--but requires implicit anchor
• Attribute focus:– Greater weight to more important attributes due
to motive to ignore less important attributes
• Level focus:– Negativity: due to loss aversion and moderate
reference level
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Hypotheses--Matching
• Most complex task--pair differences put in metric of matching variable
• Attribute focus:– Greater weight to the matching variable: due to
compatibility with response scale and anchoring and incomplete adjustment
• Level focus:– Focus on differences makes nonlinear
responses difficult
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Linear Partworths Study
• Sample: 80 MBA’s given bonus for how well they match management’s values
• Training: 7 choice and 9 matching tasks with only two attributes varying
• Tasks: 18 choice, matching and rating judgments with five attributes varying
• Four labeling conditions
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Four Labeling Conditions
Attr. 1 Attr. 2 Attr. 3 Attr. 4 Attr. 5
Weight 36% 28% 16% 11% 9%
Condition
1. Total Cost Slope Quality Snow Probability Travel Time Night Life
2. Slope Quality Total Cost
3. Lift Wait Time Slope Quality
4. Slope Quality Lift Wait Time
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Target Partworths
TRUE PARTWORTHS
0
50
100
150
200
250
1 2 3
Attribute Weight 36%
29%
16%
11%
9%
Low -end Weight .50
.50
.50
.50
.50
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True ------------------ChoicePartworths Partworths
CHOICE
0
50
100
150
200
250
1 2 3
Shift in Attribute Weight -3%
-3%
+19%
+26%
-43%
Shift in Low -endWeight +22%
+46%
+9%
+53%
+66%
TRUE PARTWORTHS
0
50
100
150
200
250
1 2 3
Attribute Weight 36%
29%
16%
11%
9%
Low -end Weight .50
.50
.50
.50
.50
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True -----------------MatchingPartworths Partworths
TRUE PARTWORTHS
0
50
100
150
200
250
1 2 3
Attribute Weight 36%
29%
16%
11%
9%
Low -end Weight .50
.50
.50
.50
.50
MATCHING
0
50
100
150
200
250
1 2 3
Shift in Attribute Weight +46%
-21%
-13%
-22%
-65%
Shift in Low -endWeight 0%
+7%
+17%
0%
+1%
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Linear Tradeoff Study--Results(Standard deviation)
CHOICE RATINGS MATCHING
Attribute Focus:-3% -9% 46%
(14.3) (14.8) (10.3)
Level Focus40% 18% 3%
(27.0) (8.6) (4.7)
Decision Time19 11 26
(3.0) (1.9) (5.2)
Attitudes (0-100)Realistic 67 61 53Confident 63 57 43
Easy 58 49 39Interesting 57 56 55
Percent Overweighting of the Top Attribute
Percent Overweighting Least Liked Levels
Time per judgment in seconds
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Linear Tradeoff Study--Summary
• Labeling has minimal impact--respondents are able to overcome priors
• Attribute focusing--No evidence in choice and ratings, matching puts 46% extra weight on matching variable
• Level focusing--Choice evokes strong, ratings moderate, and matching no negativity
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Nonlinear Study--Motivation
• Will results hold under task of greater complexity?
• Will negativity hold in context of increasing returns?
• Does matching encourage linearity?
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Nonlinear Study--Design
• One labeling condition
• 60 MBA’s
• Two balanced nonlinear targets
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Two Nonlinear TargetsRelative importance of shift from Poor -----> Fair -----> Good
Total cost ($900-$600-$300)
Ski slope quality (C-70, B-80, A-90)
Likelihood of Excellent Snow (50%,70%,90%)
Travel time (6-4-2 hours)
Night Life (poor, fair, good)
Relative importance of shift from Poor -----> Fair -----> Good
Total cost ($900-$600-$300)
Ski slope quality (C-70, B-80, A-90)
Likelihood of Excellent Snow (50%,70%,90%)
Travel time (6-4-2 hours)
Night Life (poor, fair, good)
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True ------------------ChoicePartworths Partworths
TRUE PARTWORTHS
0
50
100
150
200
250
1 2 3
Attribute Weight 36%
29%
16%
11%
9%
Low -end Weight .50
.50
.50
.50
.50
CHOICE
0
50
100
150
200
250
1 2 3
Shift in Attribute Weight -9%
-2%
+45%
-11%
-23%
Shift in Low -end Weight +20%
+27%
+4%
+15%
+84%
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True -----------------RatingsPartworths Partworths
TRUE PARTWORTHS
0
50
100
150
200
250
1 2 3
Attribute Weight 36%
29%
16%
11%
9%
Low -end Weight .50
.50
.50
.50
.50
RATINGS
0
50
100
150
200
250
1 2 3
Shift in Attribute Weight -21%
-2%
+23%
+27%
+17%
Shift in Low -end Weight +8%
+24%
+26%
+19%
+29%
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True -----------------MatchingPartworths Partworths
TRUE PARTWORTHS
0
50
100
150
200
250
1 2 3
Attribute Weight 36%
29%
16%
11%
9%
Low -end Weight .50
.50
.50
.50
.50
MATCHING
0
50
100
150
200
250
1 2 3
Shift in Attribute Weight +23%
-9%
-5%
-25%
-24%
Shift in Low -end Weght 0%
-4%
-7%
-11%
0%
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Attribute Focusing—Linear Study
0%
10%
20%
30%
40%
50%
0% 10% 20% 30% 40% 50%
Matching
Choice
Ratings
Target Importance Weights
Expressed Importance
Weights
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Attribute Focusing—Nonlinear Study
0%
10%
20%
30%
40%
50%
0% 10% 20% 30% 40% 50%
Matching
Choice
Ratings
Target Importance Weights
Expressed Importance
Weights
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Attribute Focusing—Nonlinear Study
0%
10%
20%
30%
40%
50%
0% 10% 20% 30% 40% 50%
Matching
Choice
Ratings
Target Importance Weights
Expressed Importance
Weights Slope = .6
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Results of the Nonlinear Study
CHOICE RATINGS MATCHINGCurvature Condition
Attribute Focus:
o-++- -9% -24% 24%
o+--+ -9% -18% 23%
Level Focus
o-++- 28% 25% 1%
o+--+ 22% 24% -8%
Decision Time
o-++- 52 18 56
o+--+ 45 22 50
Attitudes (0-100)Realistic 74 51 52Confident 59 51 51
Easy 50 47 37Interesting 54 52 59
Percent Overweighting of the Top Attribute
Percent Overweighting Least Liked Levels
Time per judgment in seconds
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Conclusions: Agent’s Ability to Express Values Depends on the
Task• Choice: strong negativity bias, no evidence
of prominence
• Ratings: quick but imprecise, ignores increasing returns
• Matching: most work, but most precise except for matching variable which overvalued
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Conclusions: Judgments as agent differ from own judgments
• Agents take more time, use more attributes
• Prominence in choice is replaced with equal weighting bias
• Matching works well in agent task, not for own values
• The agent task enables us to identify biases, avoiding the relative task statements
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Implications
• Own decision may be improved by self elicitation and getting feedback on their expression in various tasks
• Matching should not be used for evaluating the matching variable
• Negativity and loss aversion are pervasive biases in both ratings and choice