A working assumption that processes of natural and cultural evolution have tailored the mind to fit the demands and structure of its environment begs the question: how are we to characterize the structure of cognitive environments? Decision problems faced by real organisms are not like simple multiplechoice examination papers. For example, some individual problems may occur much more frequently than others, whilst some may carry much more weight than others. Such considerations are not taken into account when (i) the performance of candidate cognitive mechanisms is assessed by employing a simple accuracy metric that is insensitive to the structure of the decision-maker's environment, and (ii) reason is defined as the adherence to internalist prescriptions of classical rationality. Here we explore the impact of frequency and significance structure on the performance of a range of candidate decision-making mechanisms. We show that the character of this impact is complex, since structured...

The battle between proponents of the Efficient Markets Hypothesis and champions of behavioral finance has never been more pitched, and little consensus exists as to which side is winning or the implications for investment management and consulting. In this article, I review the case for and against the Efficient Markets Hypothesis and describe a new framework—the Adaptive Markets Hypothesis—in which the traditional models of modern financial economics can coexist alongside behavioral models in an intellectually consistent manner. Based on evolutionary principles, the Adaptive Markets Hypothesis implies that the degree of market efficiency is related to environmental factors characterizing market ecology such as the number of competitors in the market, the magnitude of profit opportunities available, and the adaptability of the market participants. Many of the examples that behavioralists cite as violations of rationality that are inconsistent with market efficiency—loss aversion, overconfidence, overreaction, mental accounting, and other behavioral biases—are, in fact, consistent with an evolutionary model of individuals adapting to a changing environment via simple heuristics. Despite the qualitative nature of this new paradigm, I show that the Adaptive Markets Hypothesis yields a number of surprisingly concrete applications for both investment managers and consultants.

Abstract. Th is study addresses the counselling of heterosexual men with low-risk behaviour who, voluntarily or involuntarily, take a HIV test. If such a man tests positive, the chance that he is infected can be as low as 50%. We study what information counsellors communicate to clients concerning the meaning of a positive test and whether they communicate this information in a way the client can understand. To get realistic data, one of us visited as a client 20 public health centres in Germany to take 20 counselling sessions and HIV tests. A majority of the counsellors explained that false positives do not occur, and half of the counsellors told the client that if he tests positive, it is 100 % certain that he is infected with the virus. Counsellors communicated numerical information in terms of probabilities rather than absolute frequencies, became confused, and were inconsistent. Based on experimental evidence, we propose a simple method that counsellors can learn to communicte risks in a more eff ective way. Former Senator Lawton Chiles of Florida reported at an AIDS conference in 1987 that of 22 blood donors in Florida who were notifi ed that they tested HIV-positive with the ELISA test, seven committed suicide. In the same medical text that reported this tragedy, the reader is informed that “even if the results of both AIDS tests, the ELISA and WB (Western blot), are positive, the chances are only 50–50 that the individual is infected ” (Stine, 1996, pp. 333, 338).

How does the domain or subject matter of a decision problem affect the outcome of the decision? Although decision-making research typically dismisses content as merely a cover story, the present research shows that it plays a fundamental role in the decision process by influencing the information processing that underlies it. An experiment is reported in which the same basic decision problem was presented in several content domains (legal traffic tickets, academic course grades, stock investments, and casino gambling). The changes in content led to changes in both strategies and mental representations, which in turn led to changes in decision outcomes, even though measures of the subjective utilities of the options remained unchanged. � 2001 Academic Press Life is a gamble. At least that is the expressed wisdom of many philosophers and behavioral scientists. This precept has led to a large literature of decisionmaking studies in which people are asked to make ratings and choices of monetary gambles like those they would encounter in casinos. Lopes (1983) described the simple monetary gamble as playing the same role in decision research that the fruit fly occupies in genetics. The prevailing view in the These data were presented at the 1998 Annual Meetings of the Psychonomic Society and Society for Judgment and Decision Making. This study was supported by NSF Grant SBR 9816458, NIMH Grant R01 MH58362, and the Psychology Department at the University of Colorado at Boulder. It is based on the doctoral dissertation of the first author. The authors thank Walter Kintsch for advice on this project as well as two anonymous reviewers who made substantial suggestions for revisions. Address correspondence and reprint requests to David A. Rettinger, Psychology Department,

this article focuses primarily on the core of a DSS, the part that directly supports modeling decision problems and identi es best alternatives. We will briey discuss the characteristics of decision problems and how decision making can be supported by computer programs. We then cover various components of DSSs and the role that they play in decision support. We will also introduce an emergent class of normative systems (i.e., DSSs based on sound theoretical principles), and in particular, decision analytic DSSs. Finally, we will review issues related to user interfaces to DSSs and stress the importance of user interfaces to the ultimate quality of decisions aided by computer programs

y be factored into the decision more heavily than is price. The execu- tive may choose to ride dow-ntown by taxi and then implement this decision by standing on line and taking a taxi to the hotel. To bring these sorts of decision situations into the laboratory, researchers commonly focused on the goal of obtaining money, which they assume is shared across people. In the prototypical task, subjects are given choice options that differ in probability and amount. The use of gambles enabled researchers to explore decision making under risk. Often, a number of different choices are made in a single experimental session, and the pattern of choices across sets is analyzed. For ample, people might be asked whether they prefer a 45% chance to win $200 or a 50% chance to win $150. Later in the same ses sion, they might be asked whether they prefer a 90% chance to win $200 or a 100% chance to win $150. At issue in studies like these is the consistency of people's choices. The anal- yses would in

This paper is based on my dissertation completed at the University of Iowa. I gratefully acknowledge the encouragement and assistance of my dissertation committee members, Ramji Balakrishnan, Joyce Berg, Douglas DeJong (Chairman), Robert Forsythe, and Tim Lowe. This paper has greatly benefited from the detailed and insightful suggestions of Marlys Lipe, Laureen Maines, and Jerry Salamon. I also appreciate

The advent of business-to-business (B2B) e-commerce market has created needs and opportunities for firms to negotiate deals online. Most negotiation support systems (NSS) in past research are text-based and the related findings could not be generalized to negotiating situations utilizing advanced electronic communication technology. This paper investigates the impact of NSS and conflict level on negotiation outcomes where participants communicated through a videoconferencing channel. Findings suggested that dyads with videoconferencing NSS support achieved higher joint outcome, but spent more time in reaching agreements - in low but not high conflict negotiation situation. Conclusion and implications were drawn.

Over the past few decades, reasoning and rationality have been the focus of enormous interdisciplinary attention, attracting interest from philosophers, psychologists, economists, statisticians and anthropologists, among others. The widespread interest in the topic reflects the central status of reasoning in human affairs. But it also suggests that

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