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

22 Pages Posted: 31 Oct 2008

See all articles by Robert J. Kauffman

Robert J. Kauffman

Singapore Management University; Singapore Management University - School of Information Systems

Lester Diamond

affiliation not provided to SSRN

Date Written: July 1989

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.

Suggested Citation

Kauffman, Robert J. and Diamond, Lester, The Business Value Effects of Cognitive Biases in Trading Workstation Window Design (July 1989). NYU Working Paper No. IS-89-068, Available at SSRN: https://ssrn.com/abstract=1289694

Robert J. Kauffman (Contact Author)

Singapore Management University ( email )

Li Ka Shing Library
70 Stamford Road
Singapore 178901, 178899
Singapore
65-6828-929 (Phone)

Singapore Management University - School of Information Systems ( email )

80 Stamford Road
Singapore, 178902
Singapore

Lester Diamond

affiliation not provided to SSRN

No Address Available

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