FFT-method expert validity
Personal shopper or salesperson – Identifying conflicts of interest in investment advise
If there is a lack of reliable data on the occurrence of specific events or knowledge on the consequences of decisions, there is a problem of uncertainty. Better decisions can hardly be achieved through the trained use of statistics or their transparent communication. Instead, the central question is how individual consumers can reduce uncertainty in their decision-making situation. Two scenarios are central here:
Why is it difficult to provide decision support for problems of uncertainty?
Decision problems of uncertainty are characterised by a lack of reliable data. This effectively rules out the direct selection of the best decision option. The support consists of identifying key strategies to reduce uncertainty. What do I need to ask to reduce the choice of potential information or options? What do I need to look for? What do I need to consider to sort out inappropriate options that do not meet the minimum requirements?
How to construct a decision tree for a consumer problem - the FFT method of expert feature validity
A. What do you need?
For the evidence-based development of FFTs, all approaches (including the FFT method of expert-based feature validity) require base data consisting of three parts: Characteristics of the problem, problem cases and the respective case assessment.
Part 1 – Characteristics of the problem
Part 2 - Problem cases
Part 3 - Case assessment
For each case in your data basis, you must know or determine whether the target criterion is met or not. In the case of health information, for example, a positive assessment would be the target criterion if it enables an informed decision, otherwise it would be a negative assessment. Without this basis of already determined profiles, no model for future decision support is possible. One approach would be to test each profile or case, i.e. determine how it turned out. This involves considerable experimental effort. The alternative is the "view of the expert", which the model approach presented here was aimed at right from the start. Several independent experts evaluate each individual case (i.e. each profile, each combination of features) with regard to the objective of the development, e.g: "Does this health information allow an informed decision?
B. How do you proceed?
- Aikman, D., Galesic, M., Gigerenzer, G., Kapadia, S., Katsikopoulos, K. V., Kothiyal, A., ... & Neumann, T. (2014). Taking uncertainty seriously: Simplicity versus complexity in financial regulation. Bank of England Financial Stability Paper, 28.
- Green, L., & Mehr, D. R. (1997). What alters physicians' decisions to admit to the coronary care unit?. Journal of Family Practice, 45(3), 219–226.
- Jablonskis, E., & Czienskowski, U. (2017). Decision trees online. http://www.adaptivetoolbox.net/Library/Trees/TreesHome#/
- Jenny, M. A., Pachur, T., Williams, S. L., Becker, E., & Margraf, J. (2013). Simple rules for detecting depression. Journal of Applied Research in Memory and Cognition, 2(3), 149–157.
- Luan, S., Schooler, L. J., & Gigerenzer, G. (2011). A signal-detection analysis of fast-and-frugal trees. Psychological Review, 118(2), 316.
- Martignon, L., Katsikopoulos, K. V., & Woike, J. K. (2008). Categorization with limited resources: A family of simple heuristics. Journal of Mathematical Psychology, 52(6), 352–361.
FFT-Methode getesteter Merkmalsvalidität
Even though investmens via the Internet are increasing due to digitalisation, most of the money from private households is still invested with bank and/or financial advisors.specially the title "financial advisor" may suggest a certain independence - but unfortunately the opposite is often the case. An independent and exclusively customer-oriented financial consultancy in the sense of a neutral purchasing consultancy is an ideal rarely achieved in practice. Advisors often have their own interests, which they, for example, receive from the bank that they work for. Many clients are not even aware of these conflicts of interest. So how can you detect such conflicts of interest? Use our decision tree to find out whether there is a conflict of interest.
For whom is the graphic suitable?
The decision tree should provide support to all consumers who can invest money, regardless of the purpose of propagation. It is intended to enable consumers to carry out a check immediately after the investment consultation before making an investment decision during the second appointment, or signing an offer
Where is the data coming from?
Cases – Which served as a basis?
Target assessment – How were the requirement profiles pre-estimated?
Potential features – Which requirements were considered?
Selection of features and modelling
What is the quality of the data?
Potential for development
Empirical evaluation with consumers
• Phillips, N. D., Neth, H., Woike, J. K., & Gaissmaier, W. (2017). FFTrees: A toolbox to create, visualize, and evaluate fast-and-frugal decision trees. Judgment and Decision making, 12(4), 344-368.
Last update: 27 November 2019.