Chapter 12 - Decision Making and Reasoning Flashcards
Classical decision theory
The earliest models about how people make decisions, often made by economists and philosophers.
The economic man and woman
This theory suggests that decision makers are fully informed regarding all possible options for their decisions and all possible outcomes of them, they are infinitely sensitive to the subtle distinctions among decision options, and they are fully rational in regard to their choice of options (they make choices to maximize something of value). People often believe that they make decisions according to this model, even when they do not.
Subjective expected utility theory
The goal of human decisions is to maximize pleasure and minimize pain. In doing so, we calculate subjective utility and subjective probability,
Subjective utility
A calculation based on the individual’s judged weightings of utility, rather than on objective criteria.
Subjective probability
A calculation based on the individual’s estimates of likelihood, rather than on objective statistical computations.
Satisficing heuristic
We consider options one by one, and select an option as soon as we find one that is good enough to meet our minimum level of acceptability.
Bounded rationality
We are rational, but within limits.
Elimination by aspects
We eliminate alternatives by focusing on aspects of each alternative, one at a time.
Conditional probability
The likelihood of one event, given another.
Representativeness heuristic
We judge the probability of an uncertain event according to how obviously it is representative of the population, and the degree to which it reflects the salient features of the process by which it is generated (looks random).
Base rate
The prevalence of an event or characteristic within its population.
Availability heuristic
We make judgments based on how easily we can call to mind what we perceive as relevant instances of a phenomenon. People often use the availability heuristic when it confirms beliefs about themselves.
Anchoring and adjustment heuristic
People adjust their evaluations of things by means of certain reference points called end anchors.
Framing effects
The way options are presented influences the selection of an option.
Illusory correlation
We often see events or attributes as going together, even when they do not.
Overconfidence
We often overvalue our own skills, knowledge and judgment.
Myside bias
We seek out information that confirms our own beliefs and disregards or ignores information that does not fit our own beliefs.
Hindsight bias
We look at a situation retrospectively, and believe that we could easily seen all the signs and events that led up to an outcome. This bias can be seen as a form of memory distortion, so people with poorer working-memory capacity are more susceptible.
Gambler’s fallacy
A mistaken belief that the probability of a given random event, such as winning or losing at a game of chance, is influenced by previous random events. For example, if one has had a lot of losses, it seems likely that the next will be a win. Men tend to be more susceptible to this fallacy.
Hot hand effect
A belief that a certain course of events will continue in the same manner.
Conjunction fallacy
Giving a higher estimate for a subset of events than for the larger set of events containing the given subset. How statistical information is presented influences how likely it is that people draw the correct conclusions from it. People who believe conspiracy theories or paranormal phenomena are more susceptible to this fallacy.
Sunk cost fallacy
The decision to continue to invest in something simply because one has invested in it before and hopes to recover/justify the original investment rather than admitting defeat.
Fast-and-frugal heuristics
Heuristics based on small fractions of information, and decisions are made rapidly. They set a standard of rationality that considers constraints, including time, information, and cognitive capacity.
Opportunity costs
The prices paid for availing oneself of certain opportunities - what will you have to give up if you choose this particular option?
Naturalistic decision making
Studying decision making in natural settings; challenges include ill-structured problems, changing situations, high risk, time pressure and a team environment. These methods allow for a focus on cognitive, emotional, and situational factors of skilled decision makers (often people working at hospitals or nuclear plants).
Benefits of group decisions
Increased effectiveness, increased number of resources and ideas, and improved memory resources.
Characteristics of groups that make good decisions
Small size, open communication, common mind-set among the members, group identification, and agreement on acceptable group behavior.
Groupthink
Premature decision making resulting from group members trying to avoid conflict. Risks and alternatives are not examined sufficiently in groupthink.
Janis’ three conditions of groupthink
- An isolated, cohesive, and homogenous group is empowered to make decisions,
- Objective and impartial leadership is absent,
- High levels of stress impinge on the decision making process.
Janis’ six symptoms of groupthink
- Closed mindedness,
- Rationalization,
- Squelching of dissent,
- Formation of a mindguard,
- Feeling invulnerable,
- Feeling unanimous.
Reasoning
The process of drawing conclusions from principles and from evidence.
Deductive validity
Logical soundness of reasoning.
Modus ponens argument
Affirming the antecedent; a positive hypothesis - “If p, then q. P. Therefore, q”.
Modus tollens argument
Denying the consequent; a negative hypothesis - “If p, then q. Not q. Therefore, not p”.
Deductive reasoning
Drawing on general statements for specific logical application. Deductive reasoning is based on logical propositions (assertions).
Pragmatic reasoning schemas
General organizing principles or rules related to particular kinds of goals, such as permissions, obligations, or causations.
Syllogisms
Deductive arguments that involve drawing conclusions from two premises.
Categorical syllogisms
The two premises state something about the category memberships of the terms.
Inductive reasoning
Going form specific observations to create a general explanation and prediction of future specific instances.
Dual-process theory of reasoning
Two complementary systems of reasoning exist. The first is a speedy associative system, sensitive to patterns and tendencies, and the second is a more deliberate rule-based system, which carefully analyzes relevant features. The two systems may be conceptualized within a connectionist framework: the associative system = pattern activation/inhibition, and the rule-based system = system of production rules.
Discounting error
We often fail to recognize that many phenomena have multiple causes.
