Cost-benefit determinants of decision process and accuracy

Both costs and benefits were manipulated in monetary terms in a business relocation task in an effort to test cost-benefit models of decision making (e.g., Beach and Mitchell, 1978). Results indicated that both information costs and awards significantly affected depth, variability, and latency of search. Effects of cost of information on decision accuracy were mediated primarily by depth of search. The strongest support for cost-benefit models of decision making consisted of the very large difference between experimental conditions and a control condition to which costs and rewards were not manipulated. Future research should further explore the importance of cost-benefit manipulations and the impact of decision process variables on decision accuracy.