Cognitive style preferences and financial management decision styles

The purposes of this paper were to describe the development of a scale which measures preferred financial decision making styles of individuals (FDMDS1), report results of an exploratory study which examined the relationships among the cognitive style preferences of 80 adults and their financial decision styles, recommend modifications in the instrument based on correlation and reliability analyses, and suggest hypotheses for future research. Items for the FDMDS1 were developed using the conceptual definitions of analyst, synthesist, idealist, realist, and pragmatist thinking styles of Harrison and Bramson (1982a,b). Results of the analyses indicated 22 internally consistent items which clearly distinguished between the analyst-synthesist and realist-pragmatist approaches to financial decision making. The analyst-synthesist and realist-pragmatist decision makers vary in reflectiveness versus impulsivity in considering and weighing alternatives; quantitative and specific versus qualitative and general information preferences; and a time orientation emphasis on long versus short-term goals.