Cognitive Reflection Versus Calculation in Decision Making

ORIGINAL RESEARCH published: 07 May 2015 doi: 10.3389/fpsyg.2015.00532 Cognitive reflection vs. calculation in decision making Aleksandr Sinayev * and Ellen Peters Department of Psychology, The Ohio State University, Columbus, OH, USA Edited by: Fabio Del Missier, University of Trieste, Italy Reviewed by: Michele Graffeo, University of Trento, Italy Constantinos Hadjichristidis, University of Trento, Italy *Correspondence: Aleksandr Sinayev, Department of Psychology, Ohio State University, Lazenby Hall, 1827 Neil Ave Mall, Columbus, OH 43210, USA Specialty section: This article was submitted to Cognition, a section of the journal Frontiers in Psychology Received: 07 January 2015 Accepted: 14 April 2015 Published: 07 May 2015 Citation: Sinayev A and Peters E (2015) Cognitive reflection vs. calculation in decision making. Front. Psychol. 6:532. doi: 10.3389/fpsyg.2015.00532 Frontiers in Psychology | www.frontiersin.org Scores on the three-item Cognitive Reflection Test (CRT) have been linked with dual-system theory and normative decision making (Frederick, 2005). In particular, the CRT is thought to measure monitoring of System 1 intuitions such that, if cognitive reflection is high enough, intuitive errors will be detected and the problem will be solved. However, CRT items also require numeric ability to be answered correctly and it is unclear how much numeric ability vs. cognitive reflection contributes to better decision making. In two studies, CRT responses were used to calculate Cognitive Reflection and numeric ability; a numeracy scale was also administered. Numeric ability, measured on the CRT or the numeracy scale, accounted for the CRT’s ability to predict more normative decisions (a subscale of decision-making competence, incentivized measures of impatient and risk-averse choice, and self-reported financial outcomes); Cognitive Reflection contributed no independent predictive power. Results were similar whether the two abilities were modeled (Study 1) or calculated using proportions (Studies 1 and 2). These findings demonstrate numeric ability as a robust predictor of superior decision making across multiple tasks and outcomes. They also indicate that correlations of decision performance with the CRT are insufficient evidence to implicate overriding intuitions in the decision-making biases and outcomes we examined. Numeric ability appears to be the key mechanism instead. Keywords: numeracy, Cognitive Reflection Test, biases, financial outcomes, individual differences, dual-system theory Introduction Scores on the three-item Cognitive Reflection Test (CRT) have been linked with dual-system theory and normative decision-making patterns (Frederick, 2005). In particular, the CRT is thought to measure monitoring of System 1 intuitions such that, if cognitive reflection is high enough, intuitive errors will be detected and the problem will be solved. However, CRT items also require numeric ability to be answered correctly. In two studies, we examined whether the CRT was predictive of superior decision making because it measures the ability to check intuitions and/or the ability to solve numeric calculations. The Cognitive Reflection Hypothesis The CRT is a popular three-item test (Frederick, 2005) thought to assess cognitive reflection because the items bring to mind intuitive but wrong solutions that have to be overridden. The prototypical 1 May 2015 | Volume 6 | Article 532 Sinayev and Peters Cognitive reflection vs. calculation are slow and controlled. System 1 quickly makes an intuitive response available in decision making; System 2 then may check the response and engage in further reasoning if an error is detected (Kahneman and Frederick, 2002; Kahneman, 2003). Importantly, System 2 is activated only after System 1 processing is complete. This temporal rigidness distinguishes it from dual-process explanations of judgment and decision making that posit more interdependencies between the two modes of thought (Loewenstein et al., 2001; Slovic et al., 2004). Many biases are said to occur due to System 1’s incorrect intuitions, so that people who check their intuitions (e.g., those scoring high on the CRT) should be less biased decision makers. Consistent with this prediction, several studies have found correlations between the CRT and decision biases. In his original paper, Frederick (2005) found that people with lower CRT scores tended to be more impatient and risk averse, therefore failing to maximize expected utility. Oechssler et al. (2009) also found that people higher on the CRT were less likely to commit conjunction fallacies and conservatism in probability updating. Other researchers have found expected CRT correlations with probability updating, base rate neglect, and under/over confidence (Hoppe and Kusterer, 2011), regression to the mean, Bayesian reasoning errors, and framing effects (Toplak et al., 2011), performance on Wason selection and denominator neglect tasks (Toplak et al., 2014), and moral judgments (Paxton et al., 2012; Royzman et al., 2014). That CRT scores correlate with fewer judgment and decision biases has been interpreted as indicative of bias avoidance requiring one to check and correct intuitions and, therefore, as support for a dual-systems explanation of decision making (Thaler and Sunstein, 2008; Kahneman, 2011). Each of these researchers assumes that differences in CRT performance indicated differences in the ability to detect and correct incorrect intuitions (i.e., the Cognitive Reflection Hypothesis). They also implicitly assume that numeric ability is an irrelevant detail when it comes to solving CRT and related problems. Contrary to this view, however, Baron et al. (2014) recently found that traditional CRT problems have no more predictive power with respect to moral preferences than similar arithmetic items without intuitive answers. These findings suggest that numeric ability may be important to CRT performance. CRT problem is the bat and ball problem: “A bat and a ball cost $1.10. The bat costs $1.00 more than the ball. How much does the ball cost?” The response “10 cents” is thought to come to mind for most, if not all, people, and many people answer “10 cents.” Some people realize that the intuitive response is incorrect, however, and researchers have believed that calculating the correct answer is straightforward at that point: “catching [the] error is tantamount to solving the problem” (Frederick, 2005, p. 27). Kahneman (2011) called the bat and ball problem “a test of people’s tendency to answer questions with the first idea that comes to mind, without checking it” (p. 65). Consistent with this view, we define Cognitive Reflection as the tendency to check and detect intuitive errors, and call the hypothesis that it is the important aspect of the CRT, the Cognitive Reflection Hypothesis. In support of the Cognitive Reflection Hypothesis, Frederick (2005) briefly noted several pieces of unpublished evidence (...truncated)