Information Choice and Utilization in an Experiment on Default Prediction

In this paper, we report the design and results of an experiment in human judgment in which decision makers were allowed to choose the information cues they used in making their judgments. The results of this study show that the subjects' choice of information, rather than their processing of the chosen cues, was the limiting factor in predicting the environmental event-in this case, default on debt. While the approach adopted here does not completely overcome the problems mentioned by Einhorn, it does provide a step in that direction