Ch. 13 - Reasoning and Decision Making Flashcards
Reasoning
The act of drawing new conclusions from existing information
Decision making
The action of choosing a specific course of behavioral actions from among multiple possibilitiees
Expected utility theory (EUT)
David Bernoulli - Theory from economics that holds that people make decisions in accordance with maximizing expected value
Neuroeconomics
A field of research that combines economics, psychology, and neuroscience in order to understand and predict human choices and reasonings, as they often seem irrational
Premises
An estimate about whether certain possible facts about the world, called propositions, are true
Proposition
Any statement that could be true or false
Deduction
A kind of reasoning process where the conclusion follows directly from the initial premises.
Induction
A kind of reasoning which relies on generalizing from/going beyond a certain set of information and extending it to make an informed guess. Inverse of deduction.
Argument from analogy
A kind of inductive reasoning in which the observation that two things share some set of properties and conclude that they must share a different property
One-shot learning
A kind of inductive learning in which a concept is learned from a single example.
Bayesian inference
A mathematical model for updating existing beliefs, called “a prior with new data.”
Generalization
Extrapolation (derive from) a limited number of observations to draw a conclusion about the broader population or category. Very important in scientific research involving sample populations.
Syllogism
A kind of reasoning that involves drawing a conclusion from two or more propositional statements
Statistical syllogism
A form of inductive reasoning in which observations about a group lead to an inference about an individual
Categorical syllogism
Kind of syllogism consisting of three statements: two premises and one conclusion
1: All A is B
2: All C is A
3: All C is B
Fallacy
Invalid syllogism
Belief bias
A bias in deductive reasoning in which conclusions that are more believable are rated as being more valid. Likely caused by heuristics.
Atmosphere effect
A tendency to rate conclusions as more valid when the qualifying words in the premises match those conclusions. Suggests that people don’t analyze syllogisms by following rules of logic.
Mental model
A kind of mental simulation of the world.
Mental model theory
Johnson-Laird 1983. People construct mental models based on the description in the syllogism. If syllogisms involve concrete concepts, people will generate visualizations to check validity. Not conclusively proven, but most supported theory
Conditional/hypothetical syllogism
A kind of syllogism that states a rule that relates two propositions
Modus ponens (affirming the antecedent)
A rule in relation to a conditional syllogism in which the antecedent is observed to be true, then the consequent may be concluded to be true
Modus tollens (denying the consequent)
A rule in relation to a conditional syllogism when we observe that the consequent is false and conclude that the antecedent must be false as well
Affirming the consequent
An invalid conclusion from a conditional syllogism in which one concludes the antecedent is true because the consequent is true
Denying the antecedent
A kind of invalid reasoning from a conditional syllogism in which one concludes that the consequent is false based on the antecedent being false
Wason (1968)
Presented participants with four cards with letters on one side and numbers on the other. Rule: if there is a vowel on one side, there is an even number on the other. How to determine if the rule is true? Flip the vowel to prove the rule, and flip the odd number to make sure the rule isn’t disproved. most people were wrong. were more right with real-world situations.
Confirmation bias
A tendency for people to find supporting evidence for a hypothesis or belief
Heuristics
Mental shortcuts for drawing inferences based on limited information without slow deliberation. Can lead to systematic error
Systems 1 & 2
System 1: Fast/automatic. Low effort thinking - inductive
System 2: Slow/deliberate thought - deductive
Availability heuristic/bias
Tendency to rely on information that quickly comes to mind when trying to make a decision (more words with K as the third letter than the first). Important mechanism in how people assess risk,
Affect heuristic/bias
A reasoning heuristic consisting of a tendency for people to overestimate the risk of events that generate a strong emotional reaction
Anchoring heuristic/bias
A reasoning heuristic in which people tend to focus and rely on initial pieces of information
Representativeness heuristic/bias
A heuristic in which people rely on a person or object conforming to a specific category while neglecting other types of information or reasoning
Conjunction fallacy
An error in logic in which people assume that two specific conditions are more probable than a single, encompassing condition.
It cannot be more probable for someone to be A and B than to be A or B alone.
Base-rate fallacy
An error in reasoning in which people ignore the underlying probability of an event in favor of some present evidence
Confirmation bias
A tendency for people to look for evidence that can serve to support their current hypothesis or belief
Cultural cognition
A tendency for people to hold beliefs about risk that are more consistent with their broader social and moral values (climate change seems more dangerous to liberals). They believe the general public would agree. Expert stats are not enough to change opinions on highly emotional issues, and can have the opposite effect.
Decision making & positivity.
People tend to overestimate the likelihood of positive events. We take more risks because of this, and don’t consider the potential negative consequence.
Incidental emotions
Emotions that are not directly related to the decision under consideration
Loss aversion
A tendency of people to prefer avoiding losing something as compared with not gaining something of equal value. (You have to have the potential to win almost double of what you might lose in order to consider it)
Endowment effect
Tendency for people to place a higher value on objects they already own over those they don’t yet own
Ikea effect
Tendency for people to place a higher value on objects they built themselves vs those that others built
Status quo bias
Tendency for people to leave things as they currently are rather than making a change
Framing effects on decision making
People make decisions differently based on how a question and information is worded, even if two scenarios are identical
Emotional factors in decision making
When people are highly emotionally aroused, they choose to do things they wouldn’t normally do.
Crimes of passion: acts of violence committed in the heat of the moment
Integral emotions
Emotions that are directly related to a decision
Incidental emotions
Emotions that are not directly related to the decision under consideration, but that happen to be the state of the person at the time they are making the decision
Incidental emotions study by Jennifer Lerner 2004
What are people’s purchasing/selling behaviors depending on emotions
3 groups. Videos made them sad, disgusted, or neutral.
Disgust made for selling and buying at the lowest price, reflecting distaste for anything
Sadness made people want to pay more, but sell for less. You want to change your current state, so you are willing to settle for higher price or lower turnout.
Ultimatum game
An experimental paradigm in which two people, a proposer and a responder, split a pot of money. Guth, 1982. Participants only get money if both agree. Responders reject offers below a 7:3 split, forgoing either of them earning money.
Ventromedial prefrontal cortex
Allows to process long-term outcomes of decisions, and importance of socially/morally appropriate decisions
Somatic marker hypothesis
vmPFC is involved in associating emotional reactions (e.g. heart rate) with certain behaviors
Stanford Marshmallow Experiment
Mischel & Ebbesen. Proves that a developed prefrontal cortex allows for the ability to delay gratification. Children in room with marshmallow. They were told not to eat it, and would get another marshmallow if they waited 15 mins. Many were perturbed. This was predictive of their ability to cope with stress later in life. PFC was more activated in non-go trials 40 yrs later.
Results could be attributed to family background and environment.
Nudge theory
An approach to behavioral modification in which conditions of the environment are used to influence behavior and decision making
Opinions on nudge theory
Some dislike it because it only results in a temporary change in behavior. Some say it is too coercive. It is sure to continue being used regardless.
