Bellman-optimal Decisions and Expert Intuition

Abstract

Engineers and other professionals believe in rationality and seek to make optimal choices most of the time. Their expert intuition is developed over years of education and practice, enhanced by various decision-support tools. Yet being human, they are prone to emotional biases leading away from the best judgement and action. Here we report statistically significant deviations from the Bellman optimality principle by participants in a lab experiment about managing an abstract production system. We find that when the supply of a key resource diminishes and people are surrounded by others in the same position, they perform below a weak form of the Bellman-optimal criterion. In contrast, one's choices become much more successful when additional expert information is made available.