BIases in thinking and decision making Flashcards
biases in thinking and decision making intiial argument
Although System 1 thinking is an efficient way to process the information we receive from the world around us (meaning that it is fast and uses minimal effort) it is also prone to errors because it depends on assumptions about the world which are sensible but which do not always match the complexities of the real world which are difficult to predict! These assumptions are often referred to as heuristics – a ‘mental shortcut’; it is usually a simple rule which is applied with little or no thought and quickly generates a ‘probable’ answer.
Demonstrating the existence of heuristics is a good way to provide empirical support for a distinct intuitive, fast and effortless system 1 mode of thinking. Understanding common errors in the way people think about the world can be useful as it helps us to anticipate poor decision making and take steps to improve it.
Heuristics can result in patterns of thinking and decision making which are consistent, but inaccurate. These patterns of thought are usually described as cognitive biases.
anchroing bias theory
the tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgements.
Can be important in situtations such as haggling or bargaining?
It all comes down to the initial piece of info u received. E.g if the price offered initially is higher or lower, that becomes the anchor for ur negotiation, e.g from 80 dollars to 60, or 180 to 160
The anchroing bias could play a sig. Role in determining sentences in courtrooms. If the max sentence stated by a judge or prosecutor is longer or shorter, this could influence the decision of long the accused should actually be in jail
tversky and kahneman study (anchoring bias)
Tversky and Kahnemann (1974)
In this study, high school students were used as participants.
Method:
Participants in the “ascending condition” were asked to quickly estimate the value of 1 X 2 X 3 X 4 X 5 X 6 X 7 X 8. Those in the “descending condition” were asked to quickly estimate the value of 8 X 7 X 6 X 5 X 4 X 3 X 2 X 1.
Since we read from left to right, the researchers assumed that group 1 would use “1” as an anchor and predict a lower value that the group that started with “8” as the anchor.
The expectation was that the first number seen would bias the estimate of the value by the participant.
Results: the median for the ascending group was 512; the median for the descending group was 2250. The actual value is 40320.
prospect theory/ framing effect
describes the way people choose between alternatives that involve risk, where the probabilities of outcomes are known.
people evaluate these losses and gains using heuristics
One of those heuristics is the framing effect, in which people react to choices depending on how they are presented or “framed.”
People prefer certain outcomes when information is framed in positive language, but prefer less certain outcomes when the same information is framed in negative language.
when we expect success we prefer a definite win rather than a possible win, but when things look bad we will gamble on an uncertain defeat rather than a definite loss.
tversky and kahneman framing effect study
Tversky and Kahneman
Aim: to test the influence of positive and negative frames on decision making
Method
Self selected sample of US undergrad students (approx 300)
Asked to make decision between one of two options in a hypothetical scenario where they were choosing how to respond to the outbreak of a disease.
For some ppt, question framed positively, some framed negatively
Scenario was:
Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimate of the consequences of the programs are as follows.
2 conditions:
Positive framing: their choices were the following:
If Program A is adopted, 200 people will be saved.
If Program B is adopted, there is 1/3 probability that 600 people will be saved, and 2/3 probability that no people will be saved.
Negative framing: their choices were the following:
If Program C is adopted 400 people will die.
If Program D is adopted there is 1/3 probability that nobody will die, and 2/3 probability that 600 people will die
^^^^ both conditions (all 4 options) were effectively the same, 200 people will survive and 400 people will not
Results
Positive framing: 72% of the participants chose Program A, whereas only 28% chose program B
Negative framing: 22% of the participants choice Program C and 78% choice Program D
Conclusion
Results show effect of framing
Where information was phrased positively, (the number of people who would be saved) people took the certain outcome, (option i) and avoided the possibility of a loss in the less certain option (option ii)
when information was phrased in terms of people dying (a negative frame) people avoided the certain loss (option C) and took a chance on the less certain option D
mceg Method Self selected sample, wanted to do it Not realistic/ ecological validity low Clear, reliable, can be reproduced High internal validity, lots of controls Culture Doesnt take into account other cultures, all US ppt. A meta-analysis by Wang et al shows that ppl from individualistic cultures are more likely to be risk averse (dont like the risk) than those from collectivist cultures
peak end rule theory
Peak- end rule
a heuristic in which people judge an experience largely based on how they felt at its peak (i.e., its most intense point) and at its end, rather than based on the total sum or average of every moment of the experience.
The effect occurs regardless of whether the experience is pleasant or unpleasant.
It is not that other information aside from that of the peak and end of the experience is forgotten, but rather it is not used in reaching a decision or judgement.
kahneman et al (peak end) study
Kahneman et al
Method
repeated measures design
Asked ppt to hold their hand up to the wrist in painfully cold water until they are invited to remove it. 2 conditions:
60 seconds of immersion in water at 14 degrees Celsius. End the end of the 60 seconds the experimenter instructed them to take their hand out.
90 seconds of immersion. The first 60 seconds the same as Condition 1. At the end of 60 seconds, the researcher opened a valve that allowed slightly warmer water to flow into the tub. The water temperature rose about 1 degree Celsius
With their free hand, participants recorded how strong the pain was with 1 finger being little to no pain and 5 fingers being strong pain.
Ppt told they would get one more trial and could pick which one
Results
80% of ppt chose second option
Conclusion
Shows peak end rule
The fact that the second trial was longer was not taken into account by the participants (something called duration neglect).
They were basing their choice on how the condition ended, rather than making an overall assessment of the pain.
Method
High internal validity
Low eco validity, not realistic scenario
Ethics
Unethical bc inflicting pain on ppt
concluding signpost
Can be applied to scenarios such as in the study of relationships
Much of the research done on relationships is retrospective - for example, research on marriages that fall apart often is carried out only “after the fact.”
This means that the research is open to memory distortion on the behalf of the participants.
In a study of why a relationship ended, the researcher may ask the participant to rate the level of disclosure in the relationship. If the couple was estranged during the last year of the relationship, it is very possible that due to peak-end rule, the perception will be that disclosure was “always a problem” in the relationship, when in fact, the relationship may have been quite healthy for a significant amount of time that the couple was together.
eval theory biases in thinking and decision making
Difficult to measure the actual use of such biases in real life situations. It is possible that an anchor/ other cog. biases may play a key role, e.g when in determining how much you are willing to pay for a lamp - but in this naturalistic situation there are also other factors: how much money I have to spend, the amount of time I am willing to spend bargaining, my emotional state at the time of the purchase, whether I like the shop owner or my past experience in buying lamps. And that is not a complete list. Lots of outside factors
Since heuristics are often used unconsciously, our explanation as to how we decided what was the best price to pay is most likely a rationalization, rather than a true reflection of our thinking processes.
Much of the research in this chapter is done with Western university student samples under highly controlled - and rather artificial - conditions. Many of the questions given to the students would be of little interest to them and were not asked in a way that was natural
The studies lack ecological validity as well as cross-cultural support - assuming that cognitive biases are universal.
