When to act? Managing time-accuracy trade-offs in a dynamic belief updating task

Diagnostic decisions in dynamic environments often require trade-offs between decision accuracy and timeliness. The longer a diagnostic decision is postponed, the more the accuracy of the decision may increase, while at the same time the probability of successfully executing remedial actions decreases. Kerstholt (1994) reports that in a task where a continuous process had to be monitored, subjects' reliance on a judgment-oriented strategy (requesting additional information before making a decision) frequently led to late decisions. In this study, we were interested if similar effects appear when the motivation to postpone the decision was induced by the prospect of an alarm appearing later in the trial. A normative model based on Bayesian belief updating was constructed to determine optimal strategies under the conditions of the independent variables alarm timing (early, late) and alarm reliability (0.7, 0.9). Results are in partial agreement with earlier studies by showing evidence of a judgment-oriented strategy in the low-reliability condition. However, in the high-reliability condition, a high proportion of early decision errors, consistent with an action-oriented strategy favoring decision timeliness over accuracy, occurred.