The Influence of Basic Cognitive Processes on Economic Decision Making

Decisions are commonly considered to be determined by an individual’s preferences. However, research has found that basic cognitive processes, such as number perception, memory limitations, and selective attention can substantially influence decision making. Distinguishing between the cognitive and the preferential aspects of behavior is important to understand and predict how people make judgments and decisions. In this thesis, the influence of numerical cognition, option complexity, and cognitive ability on decision making are investigated in two projects. Results from the first study revealed that option complexity can reduce the choice probability of a monetary lottery. Similarly, the study participants also valued complex options less than simple ones. This effect was especially pronounced for individuals with relatively lower cognitive ability. These results could be best explained by assuming that humans have a tendency to avoid the exertion of cognitive effort. In the second project, the results revealed that subjecting adult participants to unfamiliar place value systems leads to them making logarithmic-looking magnitude judgments in a ruler task. ... mehrThese results support the hypothesis that the compression (underestimation) in symbolic (e.g., 4) number perception is critically shaped by the place value system of decimal numbers, and therefore looks substantively different from compression in non-symbolic (e.g., dot clouds) number perception, which was found to be power-function shaped. This distinction contributes to the understanding of how numbers in decision making tasks are processed and evaluated. Together, these projects illuminate the potential of considering the influence of basic cognitive processes on decision making in describing, understanding, and predicting decision making behavior.