The effect of challenging people’s fundamental assumptions about a task: Introducing uncertainty for reducing overprecision

Abstract

AbstractMost of us understand that our rationality is bounded by our cognitive limitations, knowledge, set of beliefs, etc. Generally, however, people are not sufficiently aware of their own bounded rationality and demonstrate overprecision vis-à-vis their decisions. In the current research we evaluate a new method to reduce the overprecision and improve the understanding of bounded rationality: In many cases people underestimate the extent of the bounds of their rationality, and, as a result, demonstrate overprecision in making their decisions. The evaluated method is challenging a person’s fundamental assumptions about a task through introducing uncertainty. Our study’s 120 participants were asked to predict the actions of a virtual player in a series of rounds of SET®, a popular card game. Challenging the fundamental assumption was done by changing the virtual player’s choice rules after 60 rounds. We juxtaposed this with a second method—explaining, giving information about bounded rationality at the beginning of the task and after rounds 10 and 62. Four experimental groups played the game in a 2 by 2 design, with the conditions Change (yes or no) and Explanations (yes or no). The results demonstrate that both methods, Explanation and Change, increased the post-knowledge of results times. We show that the new method to improve the understanding of bounded rationality, challenging the fundamental assumptions about a task through introducing uncertainty, is effective, and should be evaluated further.

Keywords

• Bounded rationality
• overconfidence
• overprecision
• uncertainty
• fundamental assumption
• post knowledge of results (PKR)