Chapter 13-pt. 2

Question 1

Pragmatic Reasoning Schema

Answer 1

Thinking about cause and effect in the world as part of experiencing every day life

Permission Schema: if A is satisfied, B can be carried out

• used in the concrete versions
• people are familiar with these rules

Question 2

Evolutionary principles of natural selection

Answer 2

Wason task governed by built in cognitive program for detecting cheating (in contrast to permission Schema)

Question 3

Social exchange theory

Answer 3

An important aspect of human behaviour is the ability of two people to cooperate in a way that is beneficial to both of them

Question 4

Cosmides and Tooby

Answer 4

• created unfamiliar situations where cheating could occur
• people look for denying the consequent in their experiment because they want to check who are cheating
• if a man eats cassava root, then he must have a face tattoo on his face
• participants did well
• evidence against permission Schema (kind of like cheating-they do well not because they are following the rules but because they are familiar with it)

Question 5

What is clear so far are:

Answer 5

Context is important

Familiarity is not always important

Question 6

Expected utility theory

Answer 6

People are rational

If they have all relevant information, they will make a decision that results in the maximum expected utility

Utility: outcomes that are desirable because they are in the person’s best interest

E.g. maximum monetary pay

Question 7

Advantages and disadvantages for utility approach

Answer 7

Advantages for utility approach:
-specific procedures to determine the “best choice”

Problems for utility approach:

• not necessarily money, people find value in other things
• many decisions do not maximize the probability of the best outcome

Question 8

Expected utility theory experiment

Answer 8

Participants could choose to randomly pick a jelly bean from a bowl with 1 red bean and 9 white beans or a bowl with 7 red beans and 93 white beans. Participants received money if they picked a red bean

Participants picked the second bowl (less probability of actually choosing a red bean but they based their decisions on the number of red beans only-goes against the expected utility theory)

Question 9

Emotions in decision making

Answer 9

Expected emotions:
-emotions that people predict that they will feel concerning an outcome

Immediate emotions:
-experienced at the time a decision is being made

People inaccurately predict their emotions

Question 10

Kermer et.al and his experiment on how people greatly overestimate the expected negative effect of losing

Answer 10

Flip a coin-either lose $3 or win $5

People greatly overestimated how upset they would be if they lost

For positive emotion (of winning) the differences aren’t very big

Question 11

Incidental emotions

Answer 11

Emotions that are not specifically related to decision making

• may be related to ones general disposition or personality, some recent experience, or ones general environment or surroundings
• can affect ones overall decision making process

Question 12

How incidental emotions affect decisions regarding setting prices to sell or buy an item

Answer 12

Neutral: high sell low buy

Disgust: about the same

Sad: low sell high buy

Question 13

Focusing illusion

Answer 13

Focus on just one aspect of situation and ignore other aspects that may be important

E.g. how happy are you?/how many dates did you have last month?

Correlation higher if ask dating first

Question 14

The effect of context on decision making

Answer 14

The likelihood that physicians would recommend a c section was the same if the test case was presented first or if it was preceded by four serious cases that required a c section

However, the likelihood that physicians would recommend a c section was higher if the same test case was preceded by four nonserious cases that didn’t require a c section

Question 15

Opt in/opt procedure and status quo bias

Answer 15

Decisions depend on how choices are presented

Opt-in procedure: active step to be organ donor

Opt-out procedure: organ donor unless request not to be (more donors in this case because they don’t have to make the decision)

Status quo bias: the tendency to do nothing when faced with making a decision

Question 16

Risky decisions

Answer 16

Risk-aversion strategy used when problem is stated in terms of gains

Risk-taking strategy when problem is stated in terms of losses

Review example slides

Question 17

Framing effect

Answer 17

Decisions are influenced by how a decision is stated (can highlight one aspect of a situation)

Tverksy and Kahnemann

• when situations are framed in terms of gains, people tend toward a risk aversion strategy
• when situations are framed in terms of loses, people tend toward a risk taking strategy

Question 18

Justifications in decision making

Answer 18

Decision-making process includes looking for justification so a rationale is presented with decision

Exam and vacation decision. No difference between failing test and passing-both give justification for a vacation. However, if test results aren’t available for two days the majority of people will keep their option to buy vacation later open (don’t have the rational yet)

Question 19

Neuroeconomics

Answer 19

One finding: decisions are influenced by emotions, and those emotions are associated with activity in specific areas of the brain

Question 20

Sanfey and coworkers

Answer 20

• ultimatum game
• often rejected low offers because they became angry that offers were unfair
• less angry with an unfair computer
• more activation of the right anterior insula (connected with emotional states), participants more likely to reject more offers
• about same for PFC (associated with cognition, decision making)

People not only consider gain but they also consider fairness of emotions

Question 21

The dual systems approach to thinking

Answer 21

Kahneman

System 1: fast, automatic, intuitive, non conscious

System 2: slower, deliberative, conscious,controlled

• Much of our day to day existence is handled by system 1
• System 2 takes over when we need to be more thoughtful

Question 22

Stanovich and West

Answer 22

• favour terms “type 1 processing” and “type 2 processing”
• similar characteristics as Kahnemans system 1 and 2 concept
• favoured by many researchers because better reflects the interconnected, distributed processing that occurs in the brain (not as two separate systems)