Decision making and Reasoning

Question 1

fallacy

Answer 1

faulty reasoning

Question 2

The Model of Economic Man and Woman

Answer 2

1. Decision makers are fully informed regarding all the possible options for their decisions and of all possible outcomes
2. They’re infinitely sensitive to the subtle distinctions among decision options
3. They are fully rational in regard to their choice of options

Question 3

Subjective Expected Utility Theory

Answer 3

The goal of Human Action is to seek pleasure and avoid pain. in doing so we calculate subjective utility and subjective probability

Question 4

bounded rationality

Answer 4

Humans are rational, but within limits

Question 5

7 types of heuristics

Answer 5

satisficing- selecting the first good enough option

elimination by aspects - eliminating options that don’t meet the Criterion

representativeness - judging the probability of an uncertain event

availability - making judgments based on how easily we can call to mind what we perceive as relevant instances of a phenomenon

anchoring-and-adjustments - adjusting evaluations of things by means of reference points

framing - the way options are presented

fast-and-frugal / take-the-best - based on little information

Question 6

Biases 3 types

Answer 6

Illusory Correlation - we see particular events or attributes and categories as going together even when they do not
Overconfidence
Hindsight bias

Question 7

4 fallacies

Answer 7

Gambler’s fallacy - a belief that the probability of a random event is influenced by previous random events

The hot hand effect - a belief that a certain course of events will continue

conjunction fallacy - giving a higher estimate for a subset of events

sunk-cost fallacy - the decision to continue to invest in something simply because one has invested in it before in hopes to recover one’s investment

Question 8

Benefits and characteristics of good group decision making

Answer 8

Benefits: different expertise of each member increase in resources and ideas improved group memory

Characteristics : small group, open communication, common mindset, members identify with the group and agree on acceptable behavior

Question 9

Groupthink and conditions that lead to it

Answer 9

Premature decision making

An isolated homogeneous group, absent objective leadership, high levels of stress

Question 10

Symptoms of groupthink (6)

Answer 10

1. Close-mindedness
2. rationalization
3. squelching of dissent
4. formation of a mind guard for the group
5. feeling invulnerable
6. feeling unanimous

Question 11

Antidotes to groupthink

Answer 11

The leader should encourage constructive criticism be impartial and insure seeking of input from outside of the group; forming of subgroups that meet separately

Question 12

Reasoning

Answer 12

The process of drawing conclusions from principles and from evidence.

Question 13

Deductive reasoning

Answer 13

Deductive reasoning is the process of drawing a logical conclusion based on logical propositions (assertions which may be true or false).

Question 14

Conditional reasoning

Answer 14

drawing a conclusion based on an if-then proposition.
if p, then q. p. therefore q. - deductive validity

if p, then q. p. therefore q. -modus ponens
if p, then q. not p. therefore, not q. - modus tollens

Question 15

The Wason Selection Task

Answer 15

“if a card has a consonant on one side, then it has an even number on the other side”

must use both modus ponens and modus tollens - trouble recognising the need for modus tollens. only after modified version

influenced by perspective effect

Question 16

pragmatic reasoning schemas

Answer 16

General organizing principles or rules related to particular kinds of goals - prior beliefs matter in reasoning

Question 17

Syllogisms

Answer 17

Deductive arguments that involve drawing conclusions from two premises. they comprise a major premise, a minor premise and a conclusion

Question 18

Categorical Syllogisms

Answer 18

The premises may be Universal affirmatives, Universal negatives, particular affirmatives, or particular negatives

a syllogism contains a middle term common to both premises

Question 19

How do people solve syllogisms? (4)

Answer 19

1. Atmosphere bias theory - people will prefer a particular solution if there is a particular in the premises
2. by conversion of premises
3. mental models
4. circle diagrams

Question 20

Obstacles in Deductive reasoning (3)

Answer 20

1. overextension errors ( strategies that may not work in all kinds syllogisms)
2. failure to consider all the possibilitoes before reaching a conclusion
3. confirmation bias

Question 21

Inductive reasoning

Answer 21

The process of reasoning from specific facts or observations to reach a likely conclusion that may explain the facts. often involves the processes of generating and testing hypotheses.

Question 22

Causal Inferences

Answer 22

How people make judgments about whether something causes something else

Question 23

Causal Inferences failures

Answer 23

1. correlation ≠ causation
2. discounting error - when something has multiple causes
3. self-fulfilling prophecy

Question 24

People draw categorical Inferences from:

Answer 24

• their sensory experiences (bottom-up) : observing and considering the degree of variability across various instances. From these observations abstract a prototype or a category and then add new instances to them
• information based on what they already know (top-down) : selectively searching in combining existing Concepts and categories

Question 25

Reasoning by analogy

Answer 25

One must observe the first pair of items and induce from them 1 or more relations. Then apply that relation in the second part of the analogy.