It is based on my own preference, yes.

While this imposes a certain amount of bias, since I may like one idea of the story more than the other or prefer one style of writing over another, I still believe it is, at least at this stage of the contest, the most fair way to judge.

Upvotes can be bought, and even further, both upvotes and comments are not merely a result of the quality of one's post. The attention a post gets is sadly not determined by its quality, but by the posting/resteeming hour, number of (active) followers that are online at the time to see it, number of real life friends/acquintances on Steemit and so forth. Hence, deciding a winner based on the number of upvotes/comments/current payout is very unfair (Without even beginning to speak of the posts that get upvotes by @curie that skyrocket the payout).

I am also open to give the deciding factor over to another judge, if you contact me over on steemit.chat, but I will only allow fellow writers to be judges so as to keep the contest at a high quality level.

So to answer your question in a "Too long; didn't read" manner:

Picking a winner is manual and on my own discretion.