11. Decision Making Flashcards
What does the rationality of a decision describe
how well you select ways of thinking/actions that best serves your goals in the limitations of an environment
What is cognitive overload
When the information available overwhelms the cognitive processing available
leads to less optimal decisions
According to Galotti, what are the five types of tasks involved with decision making
- set or revise goals
- make plans
- gather information
- structure the final decision
- make a final selection
What is decision structuring
the way of organizing information so that we are able to make a decision
what are subjective probabilities vs objective probabilities
subjective probabilities: influenced by the characteristics of the probability estimator (etc. your success depending on mood)
objective probabilities: not infuenced
what is a bias
a way of thinking that leads to systematic errors
what are cognitive illusions
systematic biases for thinking
What is the availability heuristic
Deeming that the things that comes to mind more easily are more frequent
What is the representativeness heuristic
The expectation that the results will be representative of the process that generated them
etc. coin flips
What is the mistaken belief in the law of small numbers
People mistakenly believe that small samples will resemble the populations from which they are drawn
etc. coin flips, people
A “Man who” arguments are a misuse of which heuristic
“I know a man who….”
representativeness heuristic
What are framing effects?
When we evaluate changes from a reference point
- problem: changing the description of a situation can make us adopt different reference points
think $$ of a sale
What is Anchoring?
When the initial starting point has a huge effect on the final estimate
etc. calculating 1x2x3… 8 vs 8x7x….1
What is Illusory correlation?
When we see nonexistant relationships
etc. hair twisting, finding personality vs. handwriting
What is the Hindsight Bias
Looking back, events seem inevitable
What kind of curve plots confidence against accuracy
a calibration curve
What does it mean for the calibration curve to deviate below the 45deg line
overconfidence
Explain normative vs prescriptive vs descriptive models of decision making
normative: ideal performance in ideal circumstances
prescriptive: what we “ought” to behave, given that circumstances are not ideal
- prescribe
descriptive model: what do people actually do
What kind of model is expected utility theory
normative
What is expected utility theory
maximizing the expected utility
What kind of model is image theory
descriptive model
What is the image theory model
we narrow all of our decision to a few, by comparing the
1. value image: our values and morals
2. trajectory image: our goals for the future
3. strategic image: how we want to attain the goal
What kind of decisions do experts make
recognition-primed decision making
What is recognition primed decision making
comparing the situation to previous experiences
