Confidence as a Determinant of the Direction of Order Effects: Theory and a Test in an Internal Control Judgment Setting (2001)

ABSTRACT This study examines and attempts to reconcile two theories of sequential information processing which predict opposite effects: perseverance, which predicts primacy, and the contrast-effect theory, which predicts recency. An integrated theory of revision is presented which proposes that (the effect) is an increasing (decreasing) function of confidence in beliefs. The theory was tested in an internal control judgment setting. Confidence was manipulated by varying two factors: task experience and amount of information. The theory's predictions were supported for inexperienced subjects but not for experienced subjects, suggesting that confidence affects the direction of effects only when task experience is low. INTRODUCTION Over the past several decades, judgment and decision-making research has provided considerable evidence that human judgment does not always conform to the normative rules of probability theory. One well-documented anomaly is that, contrary to Bayes's theorem, judgment is affected by the in which information is processed. However, the empirical evidence with respect to this order is itself anomalous in that the direction of the bias is inconsistent across studies. Whereas in some studies early-presented information has the greater impact on judgment, resulting in a effect, in other studies later-presented information has the greater impact and a is reported. A number of theories have been proposed to account for either primacy or recency, but we do not as yet have a cohesive theory which can explain effects in both directions. The purpose of this study is to develop and test such a theory. Specifically, this study examines and attempts to reconcile two of the more widely-cited theories which predict opposite effects. According to one theory, belief perseverance decreases the impact of later-presented information that is inconsistent with beliefs, resulting in a primacy effect (Nisbett and Ross 1980; Ross and Lepper 1980). In direct opposition is the contrast theory which predicts an increase in the impact of later-presented information that is inconsistent with beliefs, resulting in a recency effect (Einhorn and Hogarth 1985a, 1987; Hogarth and Einhorn 1992). The integrated theory presented in this study proposes that the belief-perseverance and contrast-effect theories can be reconciled by analyzing the effect of confidence on revision. Specifically, the theory maintains that in for beliefs to persevere, one must have some degree of certainty, or confidence, in one's beliefs. That is, people are not likely to cling to a about which they are uncertain. As confidence increases, however, people are likely to become increasingly less responsive to information which is contrary to their belief. The theory proposes, therefore, that (the effect) is an increasing (decreasing) function of confidence in beliefs. This further implies that when confidence is low, a recency effect is more likely to occur as a consequence of the effect. As confidence increases, however, the theory predicts a gradual reduction in recency and an eventual reversal in the direction of the effect to primacy as a result of perseverance. The theory is formalized by expanding Hogarth and Einhorn's (1992) belief-adjustment model to include the proposed effect of confidence on revision. Prior research suggests that confidence in beliefs is affected by (1) the amount of experience one has had with the task at hand (Paese and Sniezek 1991; Waller 1993), and (2) the amount of information available for making judgments (Anderson 1981; Paese and Sniezek 1991; Oskamp 1965). To the extent that these variables affect confidence, the theory presented in this paper predicts that effects will differ across subject groups with varying amounts of task experience and information. …