facand decizii

Question 1

What is decision making?

Answer 1

A type of problem solving but we already know possible solutions - you just need to select the best

Question 2

What are the 5 steps for rational decision making?

Answer 2

1. Define problem: what are you deciding between
2. Search for alternative solutions
3. Determine consequences for each solution and probability that it’s the best decision from the options available
4. Estimate costs and benefits
5. Maximise or satisfice: make a choice that will give max benefit later on / settle for a good enough option, not the best

Question 3

What is compensatory decision making?

Answer 3

A rational decision making model on which choices are systematically evaluated on various criteria
Compare and evaluate each option according to different criteria

Question 4

Why do we use heuristics?

Answer 4

To decrease the complexity of decision making
They simplify decision making
They don’t always produce a correct decision, but they are good enough most of the time
Typically used in situations of information overload, uncertainty, tiredness

Question 5

What are heuristics?

Answer 5

Strategies that guide information search and modify problem representations to facilitate solutions

Question 6

What is bounded rationality?

Answer 6

When decisions are bounded by environmental constraints (limited information) or psychological constraints (limited processing capacity or motivation)

So we produce reasonable or workable solutions by using various short-cut strategies or heuristics

Question 7

What is rational decision making? (central root processing)

Answer 7

Requires thinking about the information
Scrutinising the evidence and reasoning
Evaluate information in light of facts presented and relevant knowledge

Really thinking about something

Question 8

What is heuristic decision making? (peripheral root processing)

Answer 8

Requires little or no elaboration of information
Rely on strategies or peripheral information that may or may not produce right answer
The focus is on cues that aren’t directly related or useful

Allowing yourself to be influenced by things that are not that important

Question 9

What are the 5 heuristic decision making biases

Answer 9

1. Representativeness heuristic: new situation is judged on the basis of its resemblance to previous events
2. Conjunction fallacy: a mistaken belief that the probability of a conjunction of 2 events is greater than the probability of 1
3. Availability heuristic: a judgement or decision is based on information that is most easily retrieved from memory
4. The framing effect: the idea that the same information, problem or options can be structured and presented in different ways
5. Confirmation bias: the tendency to look for evidence in support of a belief and ignore evidence that disproves this belief