The Business Value Effects of Cognitive Biases in Trading Workstation Window Design

Abstract

Recent research on information technology (IT) value has focused on examining new theoreticalbases from which to construct robust valuation methods and models. This paper considers twoliteratures which previously have not been explored in this context: research on behavioraldecision making and information presentation effects. We begin by identifying a typology ofpotential cognitive biases and heuristics which may enhance or suppress IT value whenworkstations are used to provide decision support. To illustrate, we examine how these effectsmay become operative in screen-based securities and foreign exchange trading activities, wheredesigners can choose among information presentation formats which support trader decisionmaking. We adapt a recent model by Kroeck, Kirs and Fiedler (1989) to identify where and howinformation effects, heuristics and biases come into play in the trading environment. Ourinvestigation concludes that managerial recognition of the potential value tradeoffs associatedwith alternative trading workstation window designs is an important concern for fine-tuningtrading decision support systems. In this way, the "business value linkage" between tradingworkstation investments and the returns they provide can be more fully understood.