decision making I Flashcards
decision making
refers to selecting choice among alternative courses of action
what are decision making models
1) rational decision making model
2) intuitive decision making model
3) bounded rationality model
Rational advantages
1) establishes clear criteria for how options should be evaluated
2) urges decision makers to generate an exhaustive set of alternatives
Rational assumptions
1) people know all their available choices
2) people want to make the optimal decision
3) people have no cognitive biases
intuitive decision
arriving at a decision without conscious reasoning. People scan environment for cues to plan a course of action. only ONE CHOICE is considered at a time.
intuitive factors
changing conditions, circumstances, time pressures, constraints, and uncertainty
bounded advantages
1)recognizes the limitations of decision-making process
2) individuals choose the first acceptable alternative
Satisficing - apart of bounded rationality
accepting the first alternative that meets your minimum criteria
satisficing factor
people tend to rely on HEURISTIC which allows fast decision making
Heuristics
mental shortcuts or rules of thumbs
Heuristics (+)
saves cognitive time and effort.
Heuristics (-)
overreliance on heuristics can result in cognitive biases
Biases
tendency for people to over (or under) estimate the true parameter
cognitive biases
errors in perception that result in faulty decision making
cognitive bias effects
1) people fall into predictable decision-making traps due to an overreliance on heuristics or gut instincts
2) biases lead people to have a disported or inaccurate understanding of environment
availability bias
situations in which information that is more readily available is viewed more likely to occur.
events that are emotional, vivid, or more easily imagined are more available.
Conflate how likely something is to how frequently we are exposed to the information.
representativeness bias
tendency to assess an event as more likely to occur based on our own stereotypes.
people tend to disregard or ignore potentially relevant information - sample sizes, base rates, etc.
representativeness vs. availability
rep. is largely based on your own personal empierce.
anchoring & adjustment bias
refers to the tendency to rely too heavily on an initial refence point when making decision and failing to adjust accordingly.
- initial reference is often arbitrary
people are not good at perceiving things in absolute terms (only relative)
framing bias
tendency to be influenced by the way that problems are presented
95% fat free vs. 5% fat
loss aversion
losses loom larger psychologically than gains.
ex. leaving class 5 mins early vs. staying 5 mins late
loss aversion result
when problems are framed as losses people tend to engage in riskier behavior to avoid the psychological pain of dealing with loss
confirmation bias
tendency to process and analyze information that supports preexisting ideas
people are ego-affirming.
- people tend not to seek out disconfirming info or evidence to the contrary
awareness and training
gaining different experiences over time can help to be less susceptible to cognitive biases
