Wednesday, February 18, 2009

ID the Elasticity

Imagine that you were asked to choose between two movies recommended by Netflix. For the purposes of this exercise, also imagine that you are a cheapskate like me and have only subscribed to the “one at a time” movie rental option so you can indeed only choose one movie to watch next. In this scenario, you will not learn the title of the movie before choosing but you will learn bit by bit about three key features for each movie, one feature at a time. First you learn the names of the star actors and actresses for each film. Then, after a few seconds, you learn who directed each film. Finally you are told each movie’s genre. You do not have to make a choice until you have heard all of the information.

Now, does the order in which the feature information is presented make any difference? For instance, if instead you were told first about the genre, then the actors, and then the director would you make a different choice of film than in the original scenario? Could you find yourself spending the weekend with The Wedding Crashers instead of Apocalypse Now simply because the order changed? Normative decision theory holds that order doesn’t matter. However, research into Information Distortion by J. Edward Russo, Victoria Medvec, and others suggests that, in practice, order matters a great deal to decision makers. It has long been known that people irrationally seek out and interpret information in ways to favor a decision that has already been made. This happens for a variety of reasons including cognitive dissonance reduction. However, Information Distortion (ID) takes place much earlier, before the decision has actually been made which makes it all the more fascinating. ID theory suggests that someone just has to form an initial preference for one option over another and thereafter any new information he or she receives gets distorted to favor that initial preference. Like when standing in front of a funhouse mirror, with ID the new facts themselves look materially different. So in our movie example, if the first thing learned was the directors, David Dobkin and Francis Ford Coppola respectively, you would be more likely to interpret further information with a bias toward your initial preference based only on director (hopefully Coppola). If instead you first considered “drama or comedy” and your initial preference tilted toward comedy, then when you later learned about the directors you might suddenly have a new found respect for David Dokin and have a greater chance of watching Vince Vaughn get crushed in backyard football and tied to the bed posts.

Why does ID happen? Russo along with collaborators Kurt Carlson, Margaret Meloy, and Kevyn Yong put forth an answer in their 2008 paper published in the Journal of Experimental Psychology. Their research examines three possible goals as causes of ID: conserving effort, creating separation (making the choices more distinct), and maintaining consistency. Over the course of three experiments they conclude that consistency is the most likely explanation. However, it should be noted that these experiments tested a limited universe of three theories. There could be other significant factors in ID.

Before considering additional factors it is worth making a few observations about the theories chosen for testing by Russo and colleagues. Of the theories, only consistency has a strong social element. I would guess if subjects were asked to explicitly rank their goals by importance that consistency would be ranked highest. Additionally, the goal of conserving effort would be associated with making a quick decision. Quick decisions are only made once, early in the process, and then it is over. So in this case subjects have limited opportunity to express their goal to experimenters as a "conserving effort" subject would presumably make their decision and then try to just ignore further information. On the other hand, a "consistency driven" subject must express their goal each time he or she faces new information. It may be difficult to compare this two goals using the same experimental design.

Now, a few alternative explanations do come to mind. Perhaps subjects experience a form of “trial choice” and start “rooting” for their choice to be right. With this theory, although subject are not yet locked into a decision, they are trying it on for size and simulating the experience of having made a final choice. If this alternative theory is true then there may be very little new at all going on with ID. Instead the phenomenon would be a mere extension of the classic distortion theories to trial as well as final choices. Another, less powerful, explanation lies in subject interpretation of “authoritative intent.” Chefs creating menus, professors designing word problems, and even Netflix recommenders usually present information in an intentional order and that order often follows the rule of most important information first. Subjects may be relying too much on this typical pattern.

A final alternative challenges not the goal but the mechanism of ID, elements of which are suggested in Christopher Hsee’s theory of Elastic Justification. Information Distortion in its very name implies a change in the decision maker’s interpretation of the facts themselves. Movie directors are somehow judged more tallented, when considering a prospective date five foot two is somehow a little taller, etc. However, it is possible that something else is going on. Sure subject interpretation of a new fact may change a little yet the weight given in the final decision to the importance of that fact could be altered more dramatically. You might still think Owen Wilson is brilliant but the importance of actor quality in movie selection could be reduced when you learn the names of the directors first. ID cannot be entirely ruled out because this alternative does not explain all of the results in the paper; however, Russo’s experiments do not test the weighting element possibility. (Note that ID may provide an alternative explanation for Elastic Justification instead of the other way around).

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