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Is confidence in decisions related to feedback? Evidence-and lack of evidence-from random samples of real-world managerial behavior?

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Abstract

Confidence in decision making is an important dimension of managerial behavior. However, what is the relation between confidence, on the one hand, and the fact of receiving or expecting to receive feedback on decisions taken, on the other hand? To explore this and related issues in the context of everyday decision making, use was made of the ESM (Experience Sampling Method) to sample decisions taken by undergraduates and business executives. For several days, participants received 4 or 5 SMS messages daily (on their mobile telephones) at random moments at which point they completed brief questionnaires about their current decision making activities. Issues considered here include differences between the types of decisions faced by the two groups, their structure, feedback (received and expected), and confidence in decisions taken as well as in the validity of feedback. No relation was found between confidence in decisions and whether participants received or expected to receive feedback on those decisions. In addition, although participants are clearly aware that feedback can provide both “confirming” and “disconfirming” evidence, their ability to specify appropriate feedback is imperfect. Finally, difficulties experienced in using the ESM are discussed as are possibilities for further research using this methodology.

Suggested Citation

  • Robin Hogarth, 2003. "Is confidence in decisions related to feedback? Evidence-and lack of evidence-from random samples of real-world managerial behavior?," Economics Working Papers 655, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2004.
    • Handle: RePEc:upf:upfgen:655
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    1. Juslin, Peter, 1994. "The Overconfidence Phenomenon as a Consequence of Informal Experimenter-Guided Selection of Almanac Items," Organizational Behavior and Human Decision Processes, Elsevier, vol. 57(2), pages 226-246, February.
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    Cited by:

    1. Robin Hogarth, 2005. "The challenge of representative design in psychology and economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 12(2), pages 253-263.
    2. Robin M. Hogarth & Natalia Karelaia, 2005. "Simple Models for Multiattribute Choice with Many Alternatives: When It Does and Does Not Pay to Face Trade-offs with Binary Attributes," Management Science, INFORMS, vol. 51(12), pages 1860-1872, December.
    3. Robin Hogarth & Mariona Portell & Anna Cuxart, 2007. "What risks do people perceive in everyday life? A perspective gained from the experience sampling method (ESM)," Economics Working Papers 1005, Department of Economics and Business, Universitat Pompeu Fabra.

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    More about this item

    Keywords

    Decision making; learning; confidence; Leex;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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