Chapter 11: Making Decisions Flashcards
Rationality
Rational decision making has to do with selecting ways of thinking and acting to serve your goals or moral imperatives, as well as the environment permits
Cognitive Overload
When available info overwhelms the cognitive processing available
Phases of Decision Making
Setting/revising goals
Make plans
Gather info
Structure the decision
Make a final selection
Setting Goals
Decision maker takes stock of their future plans, principles and values, or priorities
Those answers influence decision making
Gathering Info
Need information before making a decision
Need to understand various options
Short and long term consequences
Who is affected in each option
Do effects change over time
Structuring the Decision
Decision structuring: the way a decision maker manages information and considerations for a decision
Need a way of organizing info for complex decisions
Especially when there are many options or many considerations to be used in making the decision
Making A Choice
Selecting from among the final set of options
Can involve objective choice (e.g. coin flip) or more complex process
May involve other decisions (e.g. when to stop gathering info, which info is more relevant)
Evaluating
Evaluation of entire decision process
Often an omitted step
Reflect on process and identify aspects to be improved, and those who should be used again
Probability
Measurement of a degree of uncertainty
Probabilities are numbers between 0 and 1
0 = complete certainty that an event will not happen
1 = complete certainty that an event will happen
People’s intuitions about probability are often wrong
Subjective Probabilities
Influenced by characteristics of probability estimator
If in a bad mood, probability estimates of success tend to be lower
Objective Probabilities
Not influenced by the person doing the estimation
Many real life circumstances are not objective
Biases
Ways of thinking that lead to systematic errors
Biases are usually understandable and often justifiable ways of thinking but can lead to error when misapplied
Cognitive Illusions
Systematic biases
Analogy to perceptual illusions
Errors of cognition that come about for understandable reasons and provide info relevant to understanding normal functioning
Heuristics
Shortcuts or rules of thumb used when estimating probability/frequency/numerosity
Availability Heuristic
Assessing the ease with which the relevant mental operation of retrieval, construction, or association can be carried out
Instances that are more easily thought of, remembered, or computed stand out more in one’s mind
Examples of Availability Heuristics
Husbands/wives are more likely to report they do more household chores because their own chores are more salient
We think words _ _ _ _ i n g are more frequent than _ _ _ _ _ n _
People judging more common cause of death is plane vs car
When Does Availability Heuristic Work Well
When we are sure that ease of constructing or calling instances to mind is unbiased
When Availability Heuristics Don’t Work
Trying to decide what occurs more often
Representativeness Heuristic
People expect that a random process will always produce results that look random
Examples of Representative Heuristic
People think its more likely to have GBBGBG than BBBGGG in birth order of siblings because it looks more random and representative
Gambler’s Fallacy
A random process will not always produce results that look random
E.g. think its more likely to spin a red if black was spun the previous time, even though it’s still 50/50
Law of Small Numbers
People expect small samples to resemble in every respect the population they are drawn from
But in reality smaller samples are more likely to deviate from the population and are not reliable to build conclusions on
Man Who Arguments
Ignoring base rate information and paying as much attention to small sample sizes as to large ones
E.g. I know a man who smoked three packs a day and lived to 110