Abstract This chapter explores a common judgmental phenomenon that is likely to play a particularly important role in judging recklessness: the hindsight effect. Because liability for punitive damages can depend so heavily on inferences about the defendant's ex ante state of mind, the chapter reports on an experimental investigation of the hindsight bias within the context of jurors' judgments of liability for punitive damages. It also extends prior work on hindsight bias by examining whether such a bias is found for other specific judgments that are important in the context of punitive damages: foreseeability of an accident, conscious awareness of grave danger, and gross deviation from an ordinary level of care. In addition to the basic question of a hindsight effect on various punitive damages judgments, the study also investigates the following questions: Does the magnitude of the harm that was caused by an accident affect the size of any hindsight bias? Does asking a person to assume the role of a juror as compared to a citizen whose personal judgment is being elicited reduce the size of any hindsight bias?
Journal Article Product Category Familiarity and Preference Construction Get access Eloïse Coupey, Eloïse Coupey Search for other works by this author on: Oxford Academic PubMed Google Scholar Julie R. Irwin, Julie R. Irwin Search for other works by this author on: Oxford Academic PubMed Google Scholar John W. Payne John W. Payne Search for other works by this author on: Oxford Academic PubMed Google Scholar Journal of Consumer Research, Volume 24, Issue 4, March 1998, Pages 459–468, https://doi.org/10.1086/209521 Published: 01 March 1998 Article history Received: 01 August 1995 Revision received: 01 April 1997 Published: 01 March 1998
Abstract Punitive damages amounts are highly unpredictable due to the use of the dollar scale, and that deliberation makes the problem worse. Is there, however, any predictability to the magnitudes of dollar awards for the same basic legal case? Further, are dollar amounts systematically higher or lower as a function of variables that should not matter from the standpoint of the legal system? This chapter presents experimental data showing the answers to those two questions in the affirmative. Specifically, the following results were found: Firstly, the dollar amounts that are requested by plaintiffs in their closing arguments to a jury have a dramatic effect on the size of the punitive damages award: the higher the request, the higher the awards. Secondly, local plaintiffs are awarded more than geographically remote plaintiffs, while the location of the defendant company does not have reliable effects on awards. The local-plaintiff effect occurred even though the lead plaintiff in the case studied was a profit-seeking company, not an individual.
This chapter provides a valuable overview of concepts and findings from behavioral decision theory and of their applicability to an understanding of criminal decision making. The decision to commit a crime is the first behavior of direct relevance to the functioning of the criminal justice system. The idea that human information-processing limitations place constraints on decision processes is referred to as the concept of bounded rationality. The human decision maker is a limited information processor who has many different simplifying strategies for making choices. The expected utility model has been used to predict and explain decisions in a wide variety of domains ranging from decisions about births to national security policies. Adoption of the expected utility model for offender decisions has a number of important implications for the criminal justice system. A central tenet of information-processing theory is that the internal representations constructed by the decision maker drive behaviors such as choice and problem solving.
A viewpoint that has recently emerged in decision research is that preferences for objects of any complexity are often constructed - not merely revealed - in generating a response to a judgment or choice task. This paper reviews a program of research that traces the constructiveness of preferences to the use of multiple strategies in decision making, contingent on task demands. It is argued that individuals often build strategies opportunistically, changing their processing on the spot depending upon the information they encounter during the course of solving the decision problem
Using 14,800 forecasts of one-year S&P 500 returns made by Chief Financial Officers over a 12-year period, we track the individual executives who provide multiple forecasts to study how their beliefs evolve dynamically. While CFOs' return forecasts are systematically unbiased, their confidence intervals are far too narrow, implying significant miscalibration. We find that when return realizations fall outside of ex-ante confidence intervals, CFOs' subsequent confidence intervals widen considerably. These results are consistent with a model of Bayesian learning which suggests that the evolution of beliefs should be impacted by return realizations. However, the magnitude of the updating is dampened by the strong conviction in beliefs inherent in the initial miscalibration and, as a result, miscalibration persists.
Choice among alternative courses of action lies at the heart of the decision-making process. The study of how people make preferential choices and judgments has been of great interest to psychologists, economists, and researchers in many other fields, and over the past 20 years a number of different strategies used by people to solve decision problems have been identified. Some of those strategies involve the processing of all relevant information about the available alternatives and explicit consideration of tradeoffs among values, whereas other strategies (heuristics) use information more selectively and tend to avoid tradeoffs. As a consequence of using such selective heuristics, people sometimes make substantial decision errors.
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