ABI Approach: Automatic Bias Identification in Decision-Making Under Risk based in an Ontology of Behavioral Economics
<|reference_start|>ABI Approach: Automatic Bias Identification in Decision-Making Under Risk based in an Ontology of Behavioral Economics: Organizational decision-making is crucial for success, yet cognitive biases can significantly affect risk preferences, leading to suboptimal outcomes. Risk seeking preferences for losses, driven by biases such as loss aversion, pose challenges and can result in severe negative consequences, including financial losses. This research introduces the ABI approach, a novel solution designed to support organizational decision-makers by automatically identifying and explaining risk seeking preferences during decision-making. This research makes a novel contribution by automating the identification and explanation of risk seeking preferences using Cumulative Prospect theory (CPT) from Behavioral Economics. The ABI approach transforms theoretical insights into actionable, real-time guidance, making them accessible to a broader range of organizations and decision-makers without requiring specialized personnel. By contextualizing CPT concepts into business language, the approach facilitates widespread adoption and enhances decision-making processes with deep behavioral insights. Our systematic literature review identified significant gaps in existing methods, especially the lack of automated solutions with a concrete mechanism for automatically identifying risk seeking preferences, and the absence of formal knowledge representation, such as ontologies, for identifying and explaining the risk preferences. The ABI Approach addresses these gaps, offering a significant contribution to decision-making research and practice. Furthermore, it enables automatic collection of historical decision data with risk preferences, providing valuable insights for enhancing strategic management and long-term organizational performance. An experiment provided preliminary evidence on its effectiveness in helping decision-makers recognize their risk seeking preferences during decision-making in the loss domain.<|reference_end|>
@article{ramos2024abi,
    title={ABI Approach: Automatic Bias Identification in Decision-Making Under
  Risk based in an Ontology of Behavioral Economics},
    author={Eduardo da C. Ramos, Maria Luiza M. Campos and Fernanda Bai~ao},
    journal={arXiv preprint arXiv:2405.14067},
    year={2024},
    archivePrefix={arXiv},
    eprint={2405.14067},
    primaryClass={cs.HC cs.AI}
}