Article

Theory and Decision

, Volume 66, Issue 2, pp 149-179

First online:

The Collapsing Choice Theory: Dissociating Choice and Judgment in Decision Making

  • Jeffrey M. StibelAffiliated withWeb.com, Inc. Email author 
  • , Itiel E. DrorAffiliated withSchool of Psychology, University of Southampton
  • , Talia Ben-ZeevAffiliated withDepartment of Psychology, San-Francisco State University

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Abstract

Decision making theory in general, and mental models in particular, associate judgment and choice. Decision choice follows probability estimates and errors in choice derive mainly from errors in judgment. In the studies reported here we use the Monty Hall dilemma to illustrate that judgment and choice do not always go together, and that such a dissociation can lead to better decision-making. Specifically, we demonstrate that in certain decision problems, exceeding working memory limitations can actually improve decision choice. We show across four experiments that increasing the number of choice alternatives forces people to collapse choices together, resulting in better decision-making. While choice performance improves, probability judgments do not change, thus demonstrating an important dissociation between choice and probability judgments. We propose the Collapsing Choice Theory (CCT) which explains how working memory capacity, probability estimation, choice alternatives, judgment, and regret all interact and effect decision quality.

Keywords

choice judgment working memory mental models decision making monty hall dilemma

JEL Classifications

D70 D80 D81 D84