Cognition Chapter 10 (Decision Making) Flashcards
What is the case study of the yacht Mignonette
It’s a case where 4 people were stranded on a life boat and decided to eat a member. They got imprisoned after.
This is interesting because they had to make a hard decision
What is the normative approach when decision making
It is the classical method
You attach a value to each outcome.
You also assess it’s probability
Value*probability=expected value
What are the problems in the normative approach
- How do you know the values and probabilities (heuristic does not always learn, algorithms are better)
- How do you know all possible events
Example here is the birthday problem or sea level estimate
What is the fast and frugal heuristic
When you make decisions based on familiarity
People often make wrong judgements about probabilities of dangers and overestimate small probabilities while underestimating large ones.
Kahnemann looked at this
What is the representativeness heuristic and a conjunction fallacy
When people make fast easy wrong decisions
Janine is more likely a psychology student than a student
Conjunction fallacy is when people believe that A and B happens more often than either A or B
What is the availability heuristic
The speed at which you can think of some examples determines your judgment of the probability
Sharks are more dangerous than cars
What is the base rate and why do people forget about it
Large scale testing can be wrong because the probability that it’s wrong is still big
Very often then more people are wrongly diagnosed (specificity) than correctly diagnosed (sensitivity)
The base rate is the amount of people where the condition is met in the population
There is the specificy and sensitivity
This can be calculated with the Bayesian theorem or with frequencies
What is the multi attribute utility theory (MAUT)
It distinguishes between attributes (important aspects) and assigned weights (importance) to them.
Add values to each alternative
–> calculate expected value (overall utility)
What is satisficing
Taking the first option that meets your criteria (good enough)
The partner you choose is simply good enough cause you can’t go through all of them
What is elimination by aspect (eba)
- Choosing an attribute (aspect)
- Eliminate all options that dont meet aspect
- Choose next aspect
- Repeat
- -> order is important
Compare MAUT and EBA/Satisficing
Maut is compansable (ersetzlich) in comparison to EBA/Satisficing but takes longer
–> a combination is often best
What is subjective utility
People are often led by subjective value rather than expected value
The more money you have the less you care about a single euro
This is why people play lottery (subjective value is very high)
What is positive and negative framing
In positive framing people tend to avoid risks
In negative framing people tend to take risks
What are framing effects
The way a dillema is formulated can have a strong influence on the outcome
Then there is no invariance
Its important to look at formulation when you want to persuade someone
What su the affect heuristic
When you frame with emotions
When you present positive or negative facts it influences choices
What is the prospect theory
It takes the irrationality in account
Basic idea is loss aversion
The decrease of utility as a consequence of loss is bigger than the increase of utility as a consequence of equal gain
What 3 other aspects should be looked at in decision making (breaches of consequentialism)
- Guilt (omission bias)
- Retaliation/revenge (prison makes people worse)
- Fairness (ultimatum games) (people in countries with less equality declines
These may be irrational but human
What are the 2 systems in thinking when making decisions
System 1: Heuristics and fast pobability estimation (often right but sometimes not)
System 2: Algorithms with a step by step solution procedure (only available recently for humans)
Define decision making
Decision making is the cognitive process of choosing between alternative possible actions
What is the endowment effect and status quo bias
When people dont want to sell something even for a higher value than they got it because of loss aversion (because of pain of losing)
When people dont tend to continue in same investements even though its bad
How do you present something (like a pizze choice) when you want to people to agree to a risky procedure
You present it with “30% chance of win”.
If you want people do not engage in risky behaviour you present it as “70% of losing”
What are somantic markers
Emotions that alter decision making.
They can be bad and subjective even though they help in risk identification
Which brain parts do the system 1 and 2 thinking occupy
1: limbic system
2: lateral prefrontal cortex
Why do older people make worse financial decisions
They overemphasize on potential benefit and care less about financial loss than young people (less activation of insula (bad emotions) and more variability in activation of nucleus accubens (risk reasoning)
Also, memory and analytic reasoning goes down with age
