Chapter 13 - Decision Making Flashcards
Judgement
the ability to make considered decisions
Reasoning
the process of drawing conclusions
Decision
the process of choosing between alternatives
Inductive Reasoning
process of drawing general conclusions based on specific observations and evidence - conclusions reached are PROBABLY TRUE (NOT THE ARISTOTLE ONE - deductive)
Factors of Inductive Arguement
Representativeness of observations: How well do the observations about a particular category represent all of the members of that category? (ex. the crows all black example suffers from a lack of representativeness because it does not consider crows from other parts of the country or the world)
Number of Observations: The argument about the crows is made stronger by adding the Washington, DC, observations to the Pittsburgh observations. However, further research reveals that the hooded crow, found in Europe, is gray with black wings and tail, and the home crow, from Asia, is gray and black. So it turns out that the conclusion “All crows are black” is not true. In contrast, the conclusion about the sun rising in Tucson is extremely strong because it is supported by a very large number of observations.
Quality of the Evidence: Stronger evidence results in stronger conclusions. For example, although the conclusion “The sun will rise in Tucson” is extremely strong because of the number of observations, it becomes even stronger when we consider scientific descriptions of how the earth rotates on its axis and revolves around
the sun. Thus, adding the observation “Scientific measurements of the rotation of the earth indicate that every time the earth rotates the sun will appear to rise” strengthens the conclusion even further.
Heuristics
“rules of thumb” that are likely to provide the correct answer to a problem but are not foolproof
Availability Heurisitics
events that more easily come to mind are judged as being more probable than events that are less easily recalled
Illusory correlations
occur when a relation- ship between two events appears to exist, but in reality, there is no relationship or the relationship is much weaker than it is assumed to be. Ex. if an individual has a bad experience with a lawyer and they immediately assume all lawyers are bad people
CAN CREATE STEREOTYPES
Representativeness Heuristic
the likelihood that an instance is a member of a larger category depends on how well that instance resembles properties we typically associate with that category
Base Rate
the relative proportion of different classes in the population
ex. In 1972, when this experiment was carried out, there were many more male farmers than male librarians in the United States, so if Robert was randomly chosen from the population, it is much more likely that he was a farmer.
when only base rate information is available, people use that information to make their estimates. However, when any descriptive information is also available, people disregard the available base rate information, and this can potentially lead to errors in reasoning. Note, however, that the right kind of descriptive information can increase the accuracy of a judgment
Conjunction Rule
that the probability of a conjunction of two events (A and B) cannot be higher than the probability of the single constituents (A alone or B alone)
ex. Because feminist bank tellers are a subset of bank tellers, it is always more likely that someone is a bank teller than a feminist bank teller.
Law of Large Numbers
the larger the number of individuals that are randomly drawn from a population, the more representative the resulting group will be of the entire population
Myside Bias
Charles Lord
a common type of cognitive bias where people process information in a manner biased toward their own prior beliefs, opinions, and attitudes
ex. selecting news sources that agree with one’s political affiliation, while ignoring any opposing arguments from other sources
Confirmation Bias
when people look for information that conforms to their hypothesis and ignore information that refutes it
Backfire effect
Person’s support for a particular viewpoint becomes stronger when presented with facts opposing their viewpoint. Person holds to their beliefs in the face of contradictory evidence.
ex. Climate change denial: Despite the overwhelming scientific evidence supporting the reality of climate change, some individuals continue to reject this evidence and deny the existence of climate change.
Deductive Reasoning
ARISTOTLE
determine whether a conclusion logically follows from statements
process of drawing specific conclusions based on general observations and evidence
Syllogism
premises (two broad statements) followed by a third statement which is the conclusion.
Categorical Syllogisms
premises and conclusion are statements that begin
with All, No, or Some.
(if there is a “some” in the statement, the conclusion ends with some).
Mental Model Approach
Phillip Johnson-Laird
The idea that people can imagine situations (visual in mind) is the basis of Johnson-Laird’s proposal that people use mental models to solve deductive reasoning problems
Mental Model
a specific situation represented in a person’s mind that can be used to help determine the validity of syllogisms in deductive reasoning
the basic principle behind mental models is that people create a model, or an imagined representation of the situation, for a reasoning problem
Conditional Syllogisms
two premises and a conclusion like categorical syllogisms, but the first premise has the form “If … then.”
Conditional Syllogism 1: Modus Ponens (“the way that affirms by affirming”) (p to q) 97% judged correctly
If I study, I’ll get a good grade.
I studied.
Therefore, I’ll get a good grade.
Conditional Syllogism 2: Modus Tollens “the way that denies by denying” (not q to not p) 60% judged correctly
If I study, I’ll get a good grade.
I didn’t get a good grade.
Therefore, I didn’t study.
Conditional Syllogism 3 (q to p) 40% judged correctly
If I study, I’ll get a good grade.
I got a good grade.
Therefore, I studied.
Issue:
If I live in Tucson, then I live in Arizona I live in Arizona.
Therefore, I live in Tucson.
It is much more obvious that the conclusion of this syllogism does not follow from the premises, because if you live in Arizona, there are lots of places other than Tucson that you could live. This shows that the way a problem or a syllogism is stated can influence how easy it is to evaluate it.
Conditional Syllogism 4 (not p = not q) 40% judged correctly
If I study, then I’ll get a good grade. I didn’t study.
Therefore, I didn’t get a good grade.
Issue: If I live in Tucson, then I live in Arizona. I don’t live in Tucson.
Therefore, I don’t live in Arizona.
Conditional Reasoning: Wason Four-Card Problem
Four cards are shown. Each card has a letter on one side and a number on the other side. Your task is to indicate which cards you would need to turn over to test the following rule:
If there is a vowel on one side of the card, then there is an even number on the other side.
E(1) K(3) 4(4) 7(2)
TURN OVER Conditional Syllogisms 1 + 2 ONLY
Falsfication Principle
To test a rule, it is necessary to look for situations that would falsify the rule
Expected Utility Theory
assumes that people are basically rational. According to this theory, if people have all of the relevant information, they will make a decision that results in the maximum expected utility, where utility refers to outcomes that achieve a person’s goals
not true people tend to ignore probability such as in deal or no deal and the red bean bowl
Permission Schema
which states that if a person satisfies a specific condition (being of legal drinking age), then he or she gets to carry out an action (being served alcohol). The permission schema “If you are 19, then you get to drink beer” is something that most of the participants in this experiment had learned, so they were able to apply that schema to the card task
Expected Emotions
emotions that people predict they will feel for a particular outcome
For example, a Deal or No Deal con- testant might think about a choice in terms of how good she will feel about accept- ing the bank’s offer of $125,000 (even though she could potentially win $500,000), how great she will feel if she wins the $500,000, but also how bad she will feel if she doesn’t accept the bank’s offer and finds out there is only $10 in her briefcase
Risk Aversion
he tendency to avoid taking risks
Expected emotions are one of the determinants of risk aversion
One of the things that increases the chance of risk aversion is the tendency to predict that a particular loss will have a greater impact than a gain of the same size
Incidental emotions
emotions that are not caused by having to make a decision. Incidental emotions can be related to a person’s general disposition (the person is naturally happy, for example), something that happened earlier in the day, or the general environment such as background music being played in a game show or the cheers of the game show audience
There is evidence that decision making is affected by these incidental emotions, even though they are not directly related to the decision. For example, in a paper titled “Clouds Make Nerds Look Good,” Uri Simonsohn (2007) reports an analysis of university admissions decisions in which he found that appli- cants’ academic attributes were more heavily weighted on cloudy days than on sunny days (nonacademic attributes won out on sunny days). In another study, he found that prospec- tive students visiting an academically highly rated university were more likely to enroll if they had visited the campus on a cloudy day (Simonsohn, 2009)
Opt-In Procedure vs Opt-Out
Opt-In: requires the person to take an active step
Opt-Out: everyone has to do something unless he or she requests not to be.
Status Quo Bias
the tendency to do nothing when faced with making a decision
Neuroeconomics
combines research from the fields of psychology, neuroscience, and economics to study how brain activation is related to decisions that involve potential gains or losses
Ultimatum Game
involves two players, one designated as the pro- poser and the other as the responder. The proposer is given a sum of money, say $10, and makes an offer to the responder as to how this money should be split between them. If the responder accepts the offer, then the money is split according to the proposal. If the responder rejects the offer, neither player receives anything. Either way, the game is over after the responder makes his or her decision
Utilily Theory: always respond yes.
Dual Systems Aproach
the idea that there are two mental systems—a fast, automatic, intuitive system, which Kahneman calls System 1, which may have seduced you into the 10 cent answer, and a slower, more deliberative, thoughtful system called System 2, which you would have used if you had thought about the problem more carefully
