ORGANIZATIONALBEHAVIORAND HUMAN PERFORMANCE33, 187-203 (1984)

Subjective Evaluation and Allocation of Resources in Routine

Decision Making
G E R R Y G I N G R I C H AND SIGFRID D . SOLI
University of Maryland
Routine decision making is a process of identifying goals, evaluating alter-
natives, and formulating appropriate strategies for attaining these goals. The
latter two stages of this process were examined in a two-part experiment. In
the first part, subjects scaled alternative combinations of the resources re-
quired for goal attainment. The results showed that an explicitly defined goal
directly influenced the utility of resources. In essence, mean utilities were
equivalent to point estimates of cost-benefit analyses. In the second part,
subjects performed a decision-making task, allocating the initial resource com-
binations to achieve an explicitly defined goal. Task performance was modeled
with linear programming techniques which provide a means of evaluating both
the subjects' decisions and the process of resource allocation and strategy
formulation. Results indicated that only 1 of 12 subjects allocated resources
o p t i m a l l y in m a k i n g d e c i s i o n s , even t h o u g h all of the subjects had
appropriately scaled the utility of these resources in the first part of the ex-
periment. Moreover, half the subjects failed to utilize the maximum available
resources in making their decisions. This outcome is discussed in terms of the
memory and attentional constraints on routine decision-making processes.
The results suggest that these constraints are most severe at the time of
strategy formulation, even when the utility of resources and the explicit goal
are known.

Routine decision making is guided by objectives and goals. When an

explicit goal is defined, a context for decision making exists, and the goal
becomes a unifying and directing force for the evaluation of choice al-
ternatives. The evaluation of each choice alternative, in turn, involves an
analysis of its costs via-g-vis its benefits. Finally, strategies for achieving
the goal are formulated, and a particular strategy is selected. The chosen
strategy may be one of the original alternatives or, more likely, some
combination of alternatives. The strategy with the best outcome with
respect to the goal is the appropriate one (Keeney & Raiffa, 1976). Thus,

We gratefully acknowledge the comments of Charles Gettys and Irwin L. Goldstein on

an earlier version of this paper. This work is based on a Master's thesis by the first author
submitted to the University of Maryland. Appreciation and thanks are due to the committee
chairman, Willard D. Larkin, and the other committee members, Nancy S. Anderson, David
L. Horton, and Kent L. Norman. A portion of this research was supported by a grant from
the Computer Science Center, University of Maryland. Part of these data was reported at
the Annual European Colloquium on Economic Psychology, Leuven, Belgium, August 1980.
Address correspondence and requests for reprints to Gerry Gingrich, Department of
Psychology, University of Maryland, College Park, MD 20742.
187
0033-5073/84 $3.00
Copyright 1984by AcademicPress, Inc.
All rightsof reproductionin any form reserved.
188 GINGRICH AND SOLI

setting goals, analyzing costs and benefits of alternatives, and formulating

strategies are the three major aspects of routine decision making. Typical
laboratory experiments examining decision making have rarely embodied
all of these aspects, thereby raising questions of their external validity
(Ebbesen & Kone6ni, 1980; Neisser, 1976). In this paper we first review
the relevance of these three aspects of routine decision making. Next,
we introduce a mathematical model of decision making based on linear
programming (Dantzig, 1963). This model can provide a formal structure
for evaluating each aspect of routine decision making. Finally, we present
the results of an experiment designed within this structure.
The importance of goals in decision-making research was stressed by
Fishburn (1964) when he defined utility as a partial function of the "set
of objectives held by the decision maker." More recently, Einhorn and
Hogarth (1981) stated that our quest for rationality in the human decision
maker requires that an experimenter's definition of optimality be con-
sonant with the goal of a decision maker. The recent review of both
laboratory and field studies on the effects of setting goals by Locke,
Shaw, Saari, and Latham (1981) concludes that goals affect performance
by "directing attention, mobilizing effort, increasing persistence, and mo-
tivating strategy development." The influence of goals on human problem
solving has also been addressed with concepts such as means-ends anal-
ysis (Newell & Simon, 1972). Kahneman and Tversky (1982) have dis-
cussed "framing effects" which occur when "alternatives are evaluated
in relation to different points of reference." Points of reference operate
as do goals to direct and unify the costs and benefits assigned to a par-
ticular alternative. Thus, while goals are relevant, naturally occurring,
and powerful in the decision-making process, choice experiments have
seldom been designed within the context of an explicitly stated goal.
Instead, subjects have generally been asked simply for a preference be-
tween two or more events, alternatives, or lotteries (e.g., Hammond,
McClelland, & Mumpower, 1980; MacCrimmon, Stanbury, & Wehrung,
1980). For example, Schoemaker (1980) presented subjects with alter-
natives of the form "50/50 chance of winning $10 or $20" or "$15 gain
for certain." Experiments such as these fail to capture the meaningfulness
of expressly formulated goals in the evaluation of alternatives.
Environmental conditions are also pertinent to the evaluation of alter-
natives (Fishburn, 1964; van Veldhoven, 1981). An evaluation of goal-
directed choice alternatives requires an identification of necessary re-
sources and a determination of the costs of these resources. For the most
part, there has been an implicit assumption of unlimited resources in
previous choice experiments, i.e., constraints on the use of resources and
materials required by alternatives have not been imposed (Kahneman &
Tversky, 1982; Hammond et al., 1980). In routine decision making, in-
 ROUTINE DECISION MAKING 189

dividuals must nonetheless trade off resources to achieve some workable

balance. Thus, individual preferences are determined in part by what one
gets and what one gives up to get it (Robinson, Baer, Banerjee, & Flachs-
bart, 1975). Resources are neither free nor unlimited. Choice experiments
which reflect this fact are more likely to capture something of the intrinsic
complexity of everyday decisions.
Routine decision making also requires the formulation of strategies.
Possible solutions usually include multiple combinations and permuta-
tions of a finite set of alternatives. The decision maker must explore
seemingly endless variations and nuances of this set in order to find the
one best strategy. However, the paradigm for the study of preference is
typically a forced-choice task in which a subject chooses between two
mutually exclusive alternatives defined a priori by the experimenter
(Hammond et al., 1980). The subject picks one alternative and is not
permitted to construct an original strategy. Because these laboratory ex-
periments present a simplified task structure, they are limited in their
ability to reveal the flexibility of most routine decision makers in the
formulation of strategies.
The structure of an ideal laboratory task should closely approximate
the conditions of routine decision making--choice as it occurs in the
natural environment. The present research represents a first attempt to
satisfy this criterion. A task was designed with an explicitly stated goal,
two alternatives, scarce resources, and the necessity of a well-formulated
strategy in obtaining the goal. This type of decision-making task may be
modeled by linear programming (Dantzig, 1963), a mathematical tech-
nique which provides a formal structure for studying choice behavior.
Linear programming has rarely been used in psychological research on
decision making. Luce and Raiffa (1957) discussed its structural similar-
ities to a two-person, zero-sum game, and Davidson, Suppes, and Siegel
(1957) used it to construct cardinal utility functions for predicting choices.
Later Rapoport (1967a, 1967b) used dynamic programming, another op-
timization technique with many similarities to linear programming, as a
formal model in his studies of multistage decision making. However,
linear programming is widely used in operations research to find the op-
timal allocation of scarce resources among competing alternatives. The
solution of a linear program results in an optimal strategy which some-
times involves a single alternative but, more often, is some combination
of alternatives.
Our decision-making experiment consisted of two tasks. In the first
task, subjects judged the usefulness of two resources, time and money,
within the context of an explicit goal. We predicted that the goal itself
would direct the scaling process and provide a common unit of measure-
ment for the two resources. That is, the scaled value of all quantities of
190 GINGRICH AND SOLI

either resource would be a direct function of the level of goal attainment

possible with that quantity. In the second task, subjects allocated the
previously scaled resources among two alternatives as they formulated
strategies to obtain their goal. These strategies were compared to the
linear programming solution. In addition, a geometric representation of
the linear programming model was used to evaluate each subject's re-
sponses for consistent patterns of allocation. Thus, the linear program-
ming model was used to provide not only a criterion for judging final
strategies, but also to investigate resource allocation and the formulation
of decision strategies.
METHOD
Subjects
Sixteen students (eight female and eight male) from the University of
Maryland volunteered to serve as subjects. Eleven were undergraduates
and five were graduate students. The subjects self-selected by meeting
two criteria: (I) a strong interest in sports and (2) a desire to achieve a
maximum level of physical fitness.
Stimuli
The stimuli consisted of combinations of differing amounts of time and
money. Thirty-six stimuli were constructed by permuting six different
amounts of time (2, 4, 6, 8, 10, and 12 hrs) with six amounts of money
($4, $8, $12, $16, $20, and $24). The values for each possible combination
of time and money were printed on a 5 x 8-in index card for presentation
on a viewing screen. In the first task, a 100-ram line segment printed on
a 5 x 8-in index card was also displayed on the viewing screen. On the
reverse side of the card was a 100-ram scale which could be seen by the
experimenter when sitting on the other side of the viewing screen facing
the subject.

Procedure
Subjects received a scaling task followed by a linear programming (LP)
task. The same stimuli were used in both tasks. Subjects were tested
individually in sessions lasting less than 2 hrs. The two tasks are de-
scribed separately.
Sealing task. First, the experimenter defined physical fitness as fre-
quent participation in aerobic exercises. The absolute frequency of ex-
ercise for maximum physical fitness was to be determined by each subject
individually. Subjects were then asked to pick two sports (Sport 1 and 2)
from the following lists of eight exercises to achieve their goal of max-
imum physical fitness: running, bicycling, swimming, stationary running,
handball, basketball, squash, and tennis. Each subject was told that one
 ROUTINE DECISION M A K I N G 191

unit of exercise of Sport 1 required 1/2 hr of time and $2 and that one unit
of exercise of Sport 2 required 1 hr of time and $1. Subjects were given
a pen and paper to record this information.
Subjects were instructed to consider combinations of time and money
resources available to them on a biweekly basis and to designate a line
segment whose length corresponded to the usefulness of each resource
combination for obtaining the goal if allocated entirely to Sport 1. The
same procedure was used with Sport 2. The line segment had endpoints
labeled "very useless" and "very useful." The experimenter sat behind
the screen, faced the subject, and measured each response on the line
segment. The 36 resource combinations were presented three times in
randomized series for a total of 108 trials for each sport.
Linear programming task. In the LP task, subjects viewed the same
resource combinations as in the scaling task and were asked to allocate
the resources to one or both of the sports in an effort to maximize the
goal of physical fitness. Their responses consisted of two values: the
integer number of exercise units allocated to Sport 1 (x) and to Sport 2
(y). Let these responses by symbolized by the notation DM(x,y) for the
decision maker's strategy. Three randomized replications were presented
for a total of 108 responses.
The subjects were given paper and a pencil and informed that they
could make calculations in determining their responses; very few of the
subjects exercised this option. They were also informed t h a t t h e experi-
menter would advise them of any response which exceeded the resources
available on a trial.

The Linear Programming Model

The structure of each trial in the LP task can be mathematically rep-
resented by the following set of equations:

Objective Function or Goal: maximize u = x + y. (1)

The variable u represents the maximum frequency of exercise obtainable

by an optimal allocation of a given combination of resources; x and y
represent the number of exercise units for Sport 1 and 2, respectively,
on a biweekly basis.

Time Constraint: (.5)x + (1.0)y ~ t. (2)

The values .5 and 1.0 represent the number of hours required per exercise
unit of Sport 1 and 2, respectively; t represents the subject's available
number of hours for exercise for a 2-week period.

Monetary Constraint: (2.0)x + (1.0)y ~< m. (3)

192 GINGRICH AND SOLI

The values 2.0 and 1.0 represent the number of dollars required per ex-
ercise unit of Sport 1 and 2, respectively; rn represents the subject's
available monetary resources for a 2-week period.
Nonnegativity Constraints: x,y >i O. (4)
The objective function and three constraints constitute a linear program-
ming problem. The mathematical solution, which may be obtained by the
simplex method (Dantzig, 1963), consists of values for x and y that op-
timize u and satisfy each constraint.
The problem and its solution can also be represented geometrically as
in Fig. 1. The four constraints bound a four-sided xy-plane called the
feasible region; any point (x,y) in the xy-plane is a possible solution to
the four simultaneous equations. An optimal point, however, is required
to maximize u; this point falls at one of the four extreme points in the
feasible region. Given the objective function, the linear programming op-
timum point, designated by LP(x,y), lies at the intersection of the time
and monetary constraint lines. The diagonal broken lines within the fea-
sible region are isopercentage contours, the locus of DM(x,y) points
which represent various percentages of the optimum LP(x,y). Note that
while these contours are parallel, they define a nonuniform gradient
within the feasible region. The gradient is steepest along the line of ap-
proach to LP(x,y) that passes through the origin with a slope of 1.0, and
is most gradual for approaches along either the time or monetary con-
straint lines.
Figure 1 represents a general form of the geometric solution. The shape

ea I
I-
tr

to
65

0 2 4 6 8 I0 12
EXERCISE UNITS: SPORT I

FIG. 1. Geometric representation of the feasible region containing possible solutions to

the linear programming problem. The feasible region is bounded by the monetary constraint
function, 2x + y <~ m, and by the time constraint function, .5x + y ~< t, and includes the
entire shaded area. The single optimal solution is located at the intersection of these two
functions and is labeled LP(x,y). The diagonal broken lines within the feasible region rep-
resent isopercentage contours, the locus of DM(x,y) values which are a fixed percentage
of the optimum solution, LP(x,y). The contours are spaced 20 percentage points apart.
 ROUTINE DECISION MAKING 193

of the feasible region changes with specific resource combinations, i.e.,

with specific values of t and m. For each LP trial analyzed, however, the
feasible region contains a unique LP(x,y), located at the intersection of
the time and monetary constraint lines.
Data Analysis
Scaling task. Scale values were generated from each subject's re-
sponses for time and money for both of the sports. Let T(t) and M(m)
represent the scale values for Sport 1 for the resources of time and
money; let T(t) and M(m) represent the scale values for Sport 2 for the
resources of time and money. Recall that for each training trial, the sub-
ject was instructed to compare the resource requirements of one sport to
the resource availability presented in the stimulus combination. In most
trials, the time resource translated into a number of exercise units is
different from that of the monetary resource. For example, given 6 hr
and $8, the time permits 12 units of exercise of Sport 1 while the money
permits only 4 units of exercise. In other words, most resource combi-
nations contained only one relevant resource--the resource which per-
mitted the fewest number of exercise units. The amount of this limiting
resource was paired with the subject's scale value for the trial. Thus, in
the example trial an estimate of the scale value M(m), where m = 8, for
Sport 1 would be obtained.
To determine all scale values for Sport 1, cell means for the 36 cells
were computed. Next, those cells containing the same type and quantity
of the limiting resource were combined to obtain a scale value for that
quantity. Identical procedures were followed to obtain the scale values
for Sport 2.1 Recall that the time and money requirements for each sport
were in inverse relation to one another. That is, Sport 1 was relatively
"money expensive," while Sport 2 was relatively "time expensive." As
a result, the limiting resource for any given stimulus combination was
usually different for the two activities. In summary, a comparison of
resource requirements with resource availability should have necessitated
a determination of the number of exercise units possible under the limiting
resource. Number of exercise units should have been used to judge the
usefulness of the stimulus combination as a whole. Consequently, the
common unit of measurement for all scale values should be units of ex-
ercise. In order to test this hypothesis, stimuli were translated into their
equivalent number of exercise units, N, and scale values were then
plotted as a function of N for each subject. These plots were inspected
and then fit by linear regression functions.
The maximum number o f exercise units possible under any limiting resource quantity
was 2, 4, 6, 8, or 12 units. At N = 2, 6, and 10 units, only two of the four categories of
scale values were obtained.
194 GINGRICH AND SOLI

L P task. Achievement of the goal of physical fitness was investigated

by comparing DM(x,y) with LP(x,y) for each trial using two different
analytical techniques. The first is based on the objective function, x + y
= u. Recall that the subjects were asked to allocate resources such that
their goal of physical fitness was maximized. Implicit in these directions
was the assumption that units of exercise are equal for both sports. There-
fore, the instructions required each subject to maximize the sum of x +
y when allocating a given resource combination and responding with a
DM(x,y). It follows that optimal allocation and goal attainment can be
measured by a comparison of (x + y) for each DM(x,y) with (x + y) for
each corresponding LP(x,y). This comparison takes the form of individual
regression analyses of these two sums across trials, where S 1 = (x + y)
in each LP(x,y), and S 2 = (x + y) in each corresponding DM(x,y). $2
values were regressed on S 1 values to obtain Sz = a + b S r If maximi-
zation of the goal is achieved, a = 0 and b = 1.0 and the regression
function reduces to $2 = $1. The obtained intercepts and slopes were
compared with these hypothesized values.
The second analysis of LP task data was geometric. Recall that all
possible solutions to an LP trial lie within a feasible region, a two-di-
mensional plane bounded by the four constraints of the trial (see Fig. 1).
This plane was normalized for each trial. Then all subjects' corresponding
DM(x,y) values were normalized, plotted in the plane, and examined for
individual and group deviations from the LP(x,y). 2 The geometric anal-
yses permit a more detailed examination of the LP data than the regres-
sion analyses by displaying each subject's responses on individual trials.
These responses indicate how each resource combination was allocated
in a particular DM(x,y), revealing not only the direction, but also the
relative size of deviations from the LP(x,y). Thus these analyses can
provide insights into the subject's processes of allocation and strategy
formulation.

2 Normalization was accomplished as follows: Let X be the maximum possible number

o f exercise units of Sport 1, the value obtaining when all resources in a combination are
allocated to Sport 1. The value X is therefore the x-coordinate of the ordered pair located
at the intersection of the abscissa and the monetary constraint (see Fig. 1). Likewise, let
Y be the maximum possible number of exercise units of Sport 2 in the trial, the y-coordinate
of the ordered pair located at the intersection of the ordinate and the time constraint. The
values of X and Y were both equated to 1.0, thereby setting two of the vertices of the
normalized feasible region to (1,0) and (0,1). Next, the values o f x and y in the LP(x,y) were
expressed as decimal fractions of X and Y, respectively; the resulting ordered pair, LP(x/
X,y/lO formed the third vertex of the normalized feasible region. The fourth vertex was, of
course, (0,0). Each subject's response was normalized in the same manner as the LP(x,y);
the values of x and y in the subject's DM(x,y) were expressed as decimal fractions of X
and Y, respectively, for plotting in the normalized space.
 ROUTINE DECISION MAKING 195

RESULTS
Scaring Task
The subjects were highly reliable in their responses to the scaling task.
Correlations between scale values representing the first and third presen-
tations of each resource combination for each sport ranged from .82 to
.98 across subjects. The results of the scaling task also confirm the hy-
pothesis that units of exercise were used by the subjects as a common
unit of measurement to rate usefulness of the stimulus combinations. To
interpret these results, the resource combinations forming the stimuli
were translated into their equivalent number of exercise units, N. As-
signed scale values were then plotted as a function of N for each subject.
Visual inspection of these plots indicated that exercise units were con-
sistently used as a standard for judging usefulness by 15 of the 16 subjects.
Only one subject exhibited large variation in scale values at each level of
N indicating that the subject had failed to use exercise units as a common
unit of measurement for the two sports. Because it was necessary in the
LP task that subjects evaluate and allocate resources in terms of exercise
units, this subject's data were excluded from the remainder of the anal-
ysis.
Subjects were also expected to exhibit a positive marginal utility at
each level of N, i.e., scale values for each subject were expected to
increase as a positive function of N. The existence of any other relation-
ship would suggest that the subject did not value goal attainment suffi-
ciently to incorporate it into usefulness judgments. Failure to consistently
use attainment of physical fitness as a goal clearly precludes optimal
performance in the LP task. Of the 15 subjects, 12 exhibited increases in
scale values corresponding to increases in N. In fact, a nearly linear
relationship relating N and scale value was observed for these subjects.
Obtained r 2 values were high, ranging from .87 to 1.00 with an average
of .93. These subjects met both criteria for successful performance in the
scaling task: they used N as a common unit of measurement in their
ratings of time and money, and they exhibited a positive marginal utility
at each level of N. The data for Subject 1 shown in panel A of Fig. 2 are
representative of these 12 subjects.
Three subjects had nonlinear asymptotic functions relating N and scale
value, as exemplified by the graph for Subject 14 in panel B of Fig. 2.
Notice that this subject used N as a standard for judging usefulness--
the variation in scale values at each level of N is quite small. However,
goal attainment was not fully incorporated into this subject's ratings, i.e.,
scale values for N = 8, 10, and 12 are approximately the same. This
subject and the two other subjects with similar asymptoti c functions
would not be expected to optimize in the LP task on any trial for which
196 G I N G R I C H A N D SOLI

I00 I i I 100- i L
B
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X 60 60
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< 40 o 4C
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N (EXERCISE U N I T S )

FIG. 2. Mean scale values displayed as a function of N, exercise units, for two represen-
tative subjects. Responses of Subject 1 are shown in panel A, and responses o f Subject 14
are shown in panel B. Points representing a single scale value are plotted as circles, and
points representing multiple scale value judgments are plotted as squares. Note that the
number of scale values for each number o f exercise units is not equal (see Footnote 1).

the sum of x + y in the LP(x,y) exceeded their asymptotic points. Fur-

thermore, the performance of these three subjects in the scaling task
makes it impossible to determine whether their performance in the LP
task, when less than optimal, was due to a failure to incorporate the goal
into their decisions or to other cognitive factors. Because of this uncer-
tainty, these three subjects were also excluded from the subsequent anal-
ysis.

LP Task
The slopes, intercepts, and r 2 values from the regression analyses re-
lating DM(x,y) and LP(x,y) are presented in Table 1 for each subject. 3
Recall that the criteria for goal maximization are a slope of 1.0 and a y-
intercept of zero. Five of the 12 subjects had slopes that did not differ
significantly from 1.0. These subjects also had four of the five smallest
intercepts. One further subject may be included with this group. This
subject had a relatively high slope value of .87 that nonetheless was
significantly less than 1.0 due to the subject's extremely high r 2 value of
.95. (Large values of r 2 reduce the t-test error term.) Thus, six subjects
appear to have allocated resources optimally as measured by the regres-
sion criteria. These subjects are identified collectively as the high-per-
formance group in Table 1.
The other six subjects exhibited poorer performance as measured in

3 L P analyses were performed on 18 o f the 36 trials. Six were eliminated because the
sum of x + y in the LP(x,y) exceeded 12, the maximum N in training. Twelve more were
eliminated because only one o f the resources was constraining, making the allocation pro-
cess trivial. For example, given a resource combination of 2 hrs and $24, money is abundant
and therefore irrelevant; only time is constraining.
 ROUTINE DECISION MAKING 197

TABLE 1
RESULTS OF INDIVIDUAL REGRESSION ANALYSES

High group L o w group

Subject Slope y-intercept r2 Subject Slope y-intercept r2

H1 .93 .15 .96 L1 .75** .47 .85

H2 .92 .0l ,94 L2 .75** .20 .80
H3 .88 -.10 .88 L3 .69** .28 ,76
H4 ,87** .53 ,95 L4 .58** 1.24 .76
H5 .83 - ,05 ,79 L5 .56** 1.19 .80
H6 .79* .21 .85 L6 ,53** 1.15 .59

* p < .05, one-tailed test.

** p < .01, one-tailed test.

terms of both their slopes and intercepts. All six slopes were significantly
less than 1.0 (p < .01). The value of their intercepts overlapped slightly
with those in the high group; however, the average intercept was .75
which differed substantially from the hypothesized zero value. These six
subjects did not perform optimally in the LP task as measured by the
regression criteria and are collectively identified as the low-performance
group in Table 1.
Whereas the regression analyses summarize the outcome of many de-
cisions, i.e., all DM(x,y) values for one subject, the geometric analyses
permit an investigation of each individual's decisions on a trial by trial
basis. Two distinct allocation processes were seen in these analyses.
Moreover, the subjects exhibiting these two processes corresponded
closely to the high- and low-performance groups identified by the regres-
sion analyses. These two processes are best exemplified by the geometric
analyses shown in the three panels of Fig. 3. These panels represent a
total of 7 of the 18 trials under analysis. Recall that the LP(x,y) is located
at the vertex created by the intersection of the time and monetary con-
straints, and that the isopercentage contours represent the locus of
DM(x,y) values which are various percentages of the optimum. Panel A
contains the results of three trials which have an LP(x,y) with x = y.
That is, the optimal solution requires equal amounts of exercise units of
each sport. 4 In contrast, the trials represented by panels B and C contain
LP(x,y) values in which x y. These two panels each contain the results
for two trims having mirror image feasible regions, one where x < y in
the LP(x,y) and one where y < x in the LP(x,y). Thus, the axes in panels
B and C do not correspond to either Sport 1 or Sport 2 individually as in

4 T h e plotted points r e p r e s e n t an average of the three L P trials for each resource com-
bination. Therefore, the plot reflects noninteger solutions, even though the original re-
s p o n s e s were c o n s t r a i n e d to be integer values.
198 GINGRICH AND SOLI

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PROPORTIONAL UNITS: SPORT
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PROPORTIONAL UNITS: SPORT A
F~G. 3. Normalized geometric representation of DM(x,y) values for three different feasible
regions. Responses of the high group of subjects are displayed as circles, and responses of
the low group are displayed as squares. The diagonal broken lines represent isopercentage
contours. The contour closest to LP(x,y) in each panel represents 90% of optimal perfor-
mance, the next closest contour 80%, with the remaining contours separated by 20 per-
centage points. Note that the horizontal and vertical axes in panels B and C are labeled in
terms of Sports A and B, not in terms of Sports 1 and 2. Sport A refers to the sport with
the higher value in the LP(x,y), and Sport B to the sport with lower value.

panel A. Instead, the normalized responses for the sport with the higher
value in the LP(x,y) are plotted on the abscissa and the normalized re-
sponses for the sport with the smaller value are plotted on the ordinate.
An examination of the three panels reveals substantial differences in
resource allocation processes for the high and low groups. The responses
for the high group lie primarily along the boundaries of the feasible region,
adjacent to either the monetary constraint function or the time constraint
function. Thus, the subjects in the high group utilized the maximum
amount of resources available to them in each stimulus combination, yet
 ROUTINE DECISION MAKING 199

only one subject in this group achieved the optimal LP(x,y) on most of
the trials. The low group, on the other hand, did not utilize all of the
resources in each stimulus, and thus their responses are concentrated
within the feasible region of each panel, away from the boundaries de-
scribed by either constraint. The high and low groups are distinguished
most clearly in panel B, but the two patterns of responses are also visible
in panels A and C.
Note in panels B and C that, as the inequality between the x and y
values in the LP(x,y) increased, subjects tended to allocate fewer re-
sources to the sport with the higher value in the LP(x,y) and more re-
sources to the sport with the lower value in the LP(x,y). While this
strategy did not produce optimal performance in either group, approxi-
mately 80% of the high group's DM(x,y) values were above the 90%
isopercentage contour. Only 20% of the low group's DM(x,y) values were
above this contour. Even though the allocation strategy of the high group
left their DM(x,y) values along the constraint lines some distance from
the optimal point, this strategy was, nonetheless, quite efficient when
expressed as a percent of optimal performance. The low group, on the
other hand, by failing to always allocate the maximum resources, also
had DM(x,y) values some distance from the optimum; however, these
points were located away from the constraint lines and in the portion of
the feasible region where the isopercentage gradient is much steeper.
Thus, more than half of the low group's DM(x,y) values fell below the
80% isopercentage contour when combined across all the stimulus con-
ditions shown in Fig. 3.
While only the trials which best discriminate the two groups have been
presented, the remaining trials generally confirm the two-way grouping
described above. Overall, the high group tended to be distinguished by
two characteristics. First, they utilized the maximum amount of resources
available in stimulus combinations, whereas subjects in the low group
did not. Second, the high group responded more appropriately on LP
trials with optimal solutions in which x ~ y.

DISCUSSION
To provide insights into routine decision making, laboratory tasks
should require the subject to identify goals, evaluate alternatives for pur-
suing these goals, and to formulate the most appropriate strategy for
achieving these goals. Subjects in the present experiment were presented
with such a task consisting of an explicit goal, two alternatives, and
limited resources.
In the scaling task, resources were scaled not in terms of their intrinsic
value, but in terms of their value in achieving the specified goal. Fur-
thermore, subjects exhibited a positive marginal utility for each additional
amount of the resource, reflecting the incorporation of the goal across
 200 GINGRICH AND SOLI

the entire range of relevant resources. The assigned scale values may be
viewed as the product of a cost-benefit analysis of each limited resource
as it pertains to the achievement of the goal. Thus goals are meaningful
to the utility of limited resources, operating to direct and unify their
assessment.
In the LP task, the strategy formulation aspect of routine decision
making was investigated. The first and most obvious question of interest
is whether the outcome of strategy formulation for each subject was
equivalent to the optimal solution of the linear programming model. The
answer was obtained by comparing each subject's final strategy, their
DM(x,y), to the optimal linear programming solution, LP(x,y). Using one
set of criteria, half of the subjects were shown to optimize, as their
DM(x,y) did not differ significantly from the LP(x,y). However, when
their performance was examined more closely in the geometric analyses,
only one of the subjects was found to be a true optimizer. Thus, human
performance in strategy formulation, as measured by its outcome, usually
fell short of optimal. As is often the case in laboratory decision making,
the human subject does not produce the results predicted by the nor-
mative algorithms of our mathematical models (Slovic & Lichtenstein,
1971; Einhorn, 1972; Dawes, 1979).
The linear programming model also can provide insights into the de-
cision-making process itself. Using a geometric representation of the
linear programming feasible region, each subject's responses were
studied on a trial by trial basis for systematic patterns of resource allo-
cation. These analyses revealed that subjects clearly are capable of al-
location, i.e., they can distribute available resource combinations be-
tween alternatives. Furthermore, individual differences in allocation pro-
cesses occur. The most obvious distinction is between subjects who used
all resources available and those who did not. By using all available
resources, a subject's DM(x,y) necessarily falls on one of the constraint
lines bounding the feasible region where the isopercentage contour gra-
dient is most gradual. This allocation strategy was used by the high group
and resulted in better overall performance. Thus, even though all subjects
exhibited a consistent ability to translate resources into exercise units in
the first task, they utilized this information with varying degrees of effi-
ciency when allocating these resources. The second task was more dif-
ficult than the first, which apparently reduced performance even for sub-
jects who were able to scale the value of available resources in terms of
exercise units.
The discrepancy between subject's performance in the LP task and the
optimal as predicted by the model is probably attributable to memory
and attention limitations. Consider the complexity of one possible process
 ROUTINE DECISION M A K I N G 201

of strategy formulation: the subject must first identify an initial resource

combination and then evaluate this combination in light of the explicit
goal. Even if the particular combination is optimal, the subject must still
formulate and evaluate other resource combinations before making this
determination. Thus, several alternatives must be successively evaluated
and the results of each evaluation must be remembered and compared.
In fact, many of the verbal reports indicated that subjects formulated
strategies in just this manner. Such a procedure certainly would place
heavy demands on working memory (Atkinson & Shiffrin, 1968; Posner
& Rossman, 1965), and errors, as measured from the LP optimal, would
ensue.
Cognitive abilities are simply more limited than those required by many
decision-making models, including the LP model. Thus, while the LP
model brings us closer to an understanding of routine decision making,
at the same time it points up a need for new models which not only
embody the important aspects of routine decision making, but also the
limits of human cognitive abilities. An important guideline in the search
for new decision-making models is Simon's concept of bounded ration-
ality (Simon, 1957). Simon (1978) defines bounded rationality in economic
terms, defining attention and computational skills as limited resources
which must be efficiently deployed in problem solving. Likewise, Navon
and Gopher (1979) have proposed a model of dual-task performance
which defines human processing abilities as scarce resources. As our
decision-making models come to give prominent positions to these cog-
nitive factors, we will be in a much better position to understand decision-
making processes and to predict their outcomes.
The present research indicates that the greatest cognitive demands in
routine decision making arise during the final part of the decision process
in which the optimal allocation strategy is selected. Thus, this aspect of
decision making deserves special attention as we attempt to improve our
models. Selecting an optimal strategy can be viewed as a constrained hill-
climbing task. That is, the feasible region provided by the linear pro-
gramming model is a problem space which must be searched by the sub-
ject to locate the optimal DM(x,y). The constraint on the search is due
to the fact that the optimal solution must always lie at the edge of the
feasible region. The two groups of performers identified in the LP anal-
yses may reflect either the existence of two distinct search processes, or
a single process which may be partially or fully implemented. The present
evidence cannot resolve this question. Nonetheless, the high group was
able to find the edge of the feasible region effectively, while the low group
was not. With the advent of interactive computer testing techniques, how-
ever, it may be possible to identify and chart the sequence of intermediate
202 GINGRICH AND SOLI

strategies s e l e c t e d b y the s u b j e c t , a n d t h u s to shed light o n the a c t u a l

s u b j e c t i v e criteria a n d p r o c e s s e s that c o m p r i s e this critical stage o f rou-
tine d e c i s i o n m a k i n g .

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RECEIVED: July 9, 1982