Externalizing the Parameters of Quasirational Thought

Abstract

The multiattribute judgment task presents a problem of deep causal ambiguity susceptible only to analysis by human judgment. Management scientists are urged to pay less attention to the role of utility function in person’s efforts to cope with this problem, and more attention to the cognitive difficulties inherent in it. They are also urged to seek behavioral significance for the parameters of mathematical models of decision and choice.

Causal ambiguity in multiattribute decision situations evokes quasirational thought. Although quasirational thought has many positive attributes, it has negative ones as well, among which are covertness and inconsistency. Both, however, can be removed by means of externalizing the properties of a person’s judgment system by use of computer graphics techniques. Both theory and method are explained, and examples of the use of the procedures in industry and community are provided.

My first purpose is to urge management scientists to pay less attention to assessing utility functions and more attention to the examination of thought processes of decision makers. My second purpose is to urge management scientists to consider behavioral criteria in addition to logical and statistical criteria when evaluating multiattribute decision models. In order to support my argument, I will provide an example of the successful application of an approach that ignores utilities and that is grounded in behavioral research rather than mathematics.

There has been a steady weakening of the traditional economists’ view that the maximization of objective utility lies at the core of all decision making. Not only have psychological, subjective, definitions of utilities replaced purely economic definitions, but empirical analyses of behavior have demonstrated the importance of the concept of uncertainty. As a result, management scientists and decision theorists approach the problems of decision makers by measuring and aggregating subjective choices, preferences, utilities, and probabilities.

Although management science has adopted a decision theory that involves more psychology than economics, it still focuses on utilities and leaves thought—a decision process unique to human beings—covert and unaided. There are two good reasons for that: (1) the large acceptance of Freud’s denigration of human thought, the wide acceptance of the unproved Freudian principle that cognition is flawed by personal motives, conscious or otherwise, and (2) the fact that human cognitive processes have come under systematic, scientific study only during the past 25 years, and therefore only recently has there been an opportunity to learn that the process of human judgment is more limited than flawed. The management scientist has had every right to ask, if subjective utilities do not guide behavior, what does?

For a period after World War II even academic psychologists began to believe that Freud might be right, that our cognitive processes are mere victims of our motives; indeed, it began to appear as if Freud’s basic notions about the distorting, self-serving effects of motivation on cognition (particularly perception and memory) were being verified experimentally. Results of the work in the last decade point precisely in the opposite direction, however. Cognition turns out to be highly veridical and highly resilient to self-serving motives.

Unfortunately, the Freudian literature, introductory textbooks and popular magazines are perpetuating the belief that not only is human cognition deeply flawed by motives, but these flaws are at the root of our inability to think our way out of our major social difficulties. A recent Time Essay (July 15, 1975) provides an example of how the popular culture perpetuates what is now folk wisdom: According to Time, “One trouble is our decline in the belief in reason...Psychology has told us that seemingly rational arguments are determined by hidden and irrational forces inside ourselves, difficult if not impossible to reach.” Of course there is a decline in the belief in reason; but that decline is based on the false belief that all that really matters in any decision situation is not cognition but motivation — not thought, but utilities. That is, the incentives and potential reward represented by personal utilities are all that matter, because personal utilities are “hidden forces” that warp our judgment and lead to failure. In sharp contrast with the popular view that argues that reason fails because of noncognitive “forces,” it will be argued here that wise decisions are in short supply because of the limited capacity of human cognition in relation to the complex problems that confront it. It must be remembered that, insofar as managerial decisions are concerned, it is the most difficult problems that are reserved for human judgment. These are the problems with deep causal ambiguity — problems that contain several entangled variables or attributes whose relations are characterized by uncertainty and ambiguity, problems that defy, and often defeat, solution because entanglement and uncertainty cannot be removed by analytical means. Such problems often contain a confused mixture of values and technology, ends and means, questions of fact and forecasts, problems for which solutions can be obtained only by resorting to the exercise of human judgment. Of course human judgment often fails because sophisticated decision makers turn to it when analytical efforts (operations research, for example) are given up.

In these circumstances judgment is required to go beyond analytical means (otherwise it would not be used). When analysis is inadequate, judgment calls upon intuition, and the residues of experience, to supplement what analysis cannot provide. As a result, the judgment process becomes quasirational; it employs analysis insofar as it can, but relies on experience and intuition to provide what analytical thought cannot provide. Thus, the cognitive basis for judgments is only partly rule-based and only partly recoverable. Additionally, the process is an uncertain one; it may (unpredictably) rely on different information at different times. Consequently, judgments cannot be fully explained in terms of the external information on which they are based. These cognitive conditions, it should be noted, are quite sufficient not only to explain failure, but they are quite sufficient to create conflict, misunderstanding and mistrust (see Brehmer & Hammond, 1976); there is no need to appeal to noncognitive “forces” to explain away our cognitive difficulties. In short, the conventional psychological reason for considering utilities, the assumption that they dominate, control and distort thought, has been overemphasized. The economists’ traditionally perfect cognizer is not flawed by an eagerness to satisfy personal preferences; the human cognizer who must exercise his human judgment with regard to multicriteria decision problems is limited in his capacity to cope with these problems.

The preparation of this paper was made possible by NIMH Grant No. MN16437. I wish to thank my colleagues Thomas R. Stewart and Leonard Adelman for their very helpful comments on an earlier draft of this chapter.