What JDM is and what it isn’t

By Dan Goldstein

As you navigate the academic world, you will inevitably have an exchange in which people ask you what field you are in. You will reply that you do JDM and people will ask you what JDM means. You will say “judgment and decision making” and then they will ask you what that means. At this point you may realize that you are not really sure.

To help you construct an answer, here are some thoughts about what JDM is and what it isn’t.

MY FAVORITE CONCISE DEFINITION

“The study of intuitive statistics.”

A LONGER DEFINITION

“The study of human decision making behavior, formal decision models, and the differences between the two.”

STATED DEFINITIONS

According to the SJDM website (full disclosure, I am a long-time co-webmaster there and may have had a hand in this definition statement) the Society’s focus is

“is an interdisciplinary academic organization dedicated to the study of normative, descriptive, and prescriptive theories of judgments and decisions. Its members include psychologists, economists, organizational researchers, decision analysts, and other decision researchers.”

According to the Center for Decision Sciences at Columbia University (full disclosure, I used to work there and may have had a hand in this definition statement):

“Theory and research in the decision sciences has followed two paths: The first is normative or prescriptive, focused on specifying criteria for evaluating decisions and providing algorithms for achieving optimal outcomes; the second is descriptive, focusing on how people actually make decisions.”

According to Jon Baron in a chapter entitled Normative Models of Judgment and Decision Making,

“The study of judgment and decision making (JDM) is traditionally concerned with the comparison of judgments to standards, standards that allow evaluation of the judgments as better or worse. I use the term ‘judgments’ to include decisions, which are judgments about what to do. The major standards come from probability theory, utility theory,  and statistics. These are mathematical theories or ‘models’ that allow us to evaluate a judgment.”

In plain language, all three definitions emphasize that JDM research describes how people decide and compares decision making to objective standards. These standards do not have to be what is supposedly correct, as we will discuss later.

DOES THE DIFFRENCE BETWEEN JUDGMENT AND DECISION MAKING REALLY MATTER?

Judgments (like estimating the distance of an object or the population of a country), and decisions (like choosing medical treatment A vs B given available information and risks) are different, but they’re so related that I find it convenient to roll everything up into ‘decision making’.  Above, Jon Baron rolls everything up into ‘judgment’. Oh well. In any case JDM or “judgment and decision making” is now a fixed phrase and there’s not much talk about the distinction between judgments and decisions.

In mainstream use, “behavioral economics” is a synonym for JDM. But if we dig into it, “behavioral economics” can refer to three areas:

  1. Experimental economics, in which economists run psychology experiments (no deception, monetary stakes, etc.)
  2. Theoretical economics in which economists prove theorems about ‘psychological’ agents
  3. Judgment and decision making, the kind you see at the SJDM conference and in the journal Judgment and Decision Making.

 

IS JDM THE STUDY OF COGNITIVE BIASES?

No. A bias is the difference between a behavior and a model of what that behavior should be or what is supposedly correct. JDM research doesn’t need to compare behavior to what it should be. Furthermore, comparing behavior to “correct” norms can be short-sighted as norms are subjective and constantly evolving. For instance, it used to be considered normatively incorrect to violate expected value. But demonstrations like the St. Petersburg Paradox caused people to appreciate that expected value is not a reasonable norm. Instead of insisting that everyone was biased, thinkers like Daniel Bernoulli changed the norm. Now we don’t think of it as a bias to go against expected value and have turned our attention to describing the risky choices people take with models like Prospect Theory and many others.

Lastly, studies showing that organisms exhibit near optimal decision behavior (i.e., no deviation from a norm on average) are clearly JDM studies, even though they don’t identify biases.

WHAT FIELDS DO JDM RESEARCHERS COME FROM?

JDM lies at the intersection of mathematical psychology and economics. From its origins, it has been centrally concerned with the comparison of human decisions with normative models of decision making, mostly those from economics. One might object that JDM researchers often come from management, marketing, and accounting, too. True, but those are really subfields of economics that have branched out on their own. (Source: me, a former marketing professor).

Here is a graph that shows the JDM society membership by field:

Source: The representative reviewers project for the SJDM conference

IS JDM SOCIAL PSYCHOLOGY?

No, at its core, JDM is mathematical / cognitive psychology and economics. The early notable JDMers were mathematical and cognitive psychologists who were finding fault in the prevailing economic model. Amos Tversky was a mathematical psychologist and Daniel Kahneman was a perception researcher when the field took off. Clyde Coombs, Ward Edwards, Dave Krantz and Robyn Dawes all had mathematical psychology affiliations at Michigan. Lola Lopes credits cognitive psychology for shaping her thinking. Gerd Gigerenzer wrote two theses on mathematical psychology. The list of SJDM past presidents comprises mostly cognitive psychologists. Core JDM research is about formal models (or standards as Baron calls them) including risk, utility, uncertainty, probability, and logic, which are core topics in economics and mathematical psychology.  Social psychology, which has been defined as “the study of the manner in which the personality, attitudes, motivations, and behavior of the individual influence and are influenced by social groups”, is clearly something else.

Words that are much more common in decision-making than in social psychology (Rate per 10,000 words)
Words that are much more common in social psychology than in decision-making (Rate per 10,000 words)

The differences are apparent when you compare the kinds of topics studied (as judged by word frequencies in a JDM conference program and a social psychology conference called Society for Personality and Social Psychology (SPSP)).

This isn’t to say there isn’t an intersection between JDM and social psychology. Many social psychologists are interested in Judgment and Decision Making. There’s an active JDM pre-conference at a massive social psychology conference called SPSP. Group decision making, for example is a growing topic within JDM that surely fits in as social psychology topic. But on the main, the elevator pitch for JDM is cognitive psychology meets economics.

This post is partially based on a couple of posts on Decision Science News:

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