Developing theory on reference point formation: Bridging information processing and decision-making


Decision-making depends on processed information and information processing motivates the impending decision. Although these two processes are thus interdependent, scholars only rarely investigate information processing and decision-making jointly. This is problematic, as it has spurred individual streams of research that are increasingly divergent. We address this concern by establishing the Cognitive Information Processing and Decision-Making (CIPDM) model as an integrative framework of the two processes. In this model, we describe the key mechanisms that explain how a perceived information element is encoded in memory and subsequently utilized in the selection of an action. We contribute to the information process and decision-making literatures, establishing an integrative framework that paves the way for a joint investigation of information processing and decision-making. It highlights the importance of the mechanisms that link the two processes, opening up new avenues to investigation how a perceived element of information is able to affect the eventual selection of an action.