Lecture 2 Flashcards
Theoretical underpinnings of nudges
Daniel Kahneman won the Nobel prize for economy in 2002.
Thinking Fast & Slow is a compilation of his groundbreaking work in the 70s and 80s.
American psychologist article = crash course
Thinking fast & slow
Elaboration on Herbert Simon’s (1950s) notion of bounded rationality in response to:
- Classical economic theories of rational decision-making: considering all options and their features to arrive at maximum utility.
- Full rationality is a normative standard compared to which humans underperform.
- Bounded rationality describes the harsh reality of human decision making (‘fast’).
He talks about bounded rationality, and not irrationality, which is about people who are truly irrational.
Bounded rationality
The idea of bounded rationality is based on the normative standard of unlimited resources of the computer. Computers have unbounded rationality and humans have bounded rationality.
Sometimes this is referred to as the human condition or the condition of man, which is the harsh reality that we cannot process all the information that is in our environment.
The history on 2 systems
The mind used to be a black box, we didn’t know what happened.
After decades of behaviourism, there was more interest in what happens in the human mind.
The early investigations in formative psychology (the cognitive revolution in the 50s), revealed something that some people didn’t like that much: the box is filled with ‘irrational’ processes (e.g., positive illusions).
The box was labelled as intuitive automatic thinking (as opposed to logical rational thinking).
What unrealistically favourable attitudes are highly prevalent in normal thought?
- Above average effect
- Illusion of control
- Unrealistic optimism about the future
What did people think about system 1? And what was the consequence?
People were very shocked about system 1 with all these biases.
System 2 was then ‘invented’ to regulate the irrational system 1.
So, the early research revealed that system 1 was present, and then system 2 was designed to regulate it.
Dual system theories
There is not one dual system theory, there are many.
There are many dual system theories, they all use different names for system 1 and system 2 but they all boil down to the same thing.
System 1 vs system 2 according to the many dual system theories
System 1
- Heuristic
- Experiential
- Intuitive
- Reflexive
- Hot
- Holistic
- Peripheral
- Implicit
- Automatic
- Associative
- Impulsive
- Unconscious
System 2
- Systematic
- Analytic
- Rational
- Deliberate
- Reflective
- Cold
- Central
- Explicit
- Controlled
- Rule based
- Reflective
- Conscious
William James’ (1842-1910) theory on 2 kinds of thinking
Associative: images from past experiences are “only reproductive”; useful for art & design. A term for things we can remember. It was inferior to true reasoning.
True reasoning: “for unprecedented situations” as a map to navigate an unknown world. For new situations we need true reasoning and thinking.
Main characteristics sytem 1 vs system 2
System 1:
- Fast
- Automatic
- ‘Unconscious’
- = Shortcuts to making a judgement
System 2:
- Slow
- Effortful
- Conscious
- = Thinking carefully, elaborating on information
Accessibility of the dual systems
System 2 is more scarce than System 1. We are always able to engage in intuitive or impulsive judgements, whereas deliberate reflective reasoning requires access to our cognitive resources. But they are not always available.
System 2 requires access to the capacity-limited central working memory resource (CWM). System 1 does not.
Access to the central working memory (CWM) can be disrupted by a concurrent working memory load (fatigue, alcohol, distraction, etc.)
When we are fatigued, distracted or under the influence of alcohol, it’s easier to turn to System 1 reasoning because System 2 reasoning is not available.
This all suggests that System 1 is default; we are always able to engage in System 1 reasoning.
Which system is the default from an evolutionary perspective? And why?
The evolutionary perspective/explanation is that system 1 is more beneficial for survival and system 2 is a luxury.
System 1 is older: swift thinking is more adaptive than slow, sequential thinking in case immediate decisions are required to survive.
System 2 is associated with language, reflective consciousness, and the capacity to think hypothetically about the future. It is more of a luxury.
Two prototypical approaches to system 1 and system 2
Social psychology vs Cognitive psychology
Systems 1 and 2 according to social psychology
System 1 = impulses lead to risky decisions
System 1 = ‘bad’
Both systems compete: system 1 needs to be restrained by system 2
Systems 1 and 2 according to cognitive psychology
System 1 = not inferior to system 2 but still error prone
System 1 = not necessarily bad but not good either (more neutral); a more balanced judgment
Both systems operate in concert.
Social psychology: Strack & Deutsch
System 1 (the horse) rules behaviour unless impulses are inhibited by system 2 (the rider).
Assumption: impulses are bad, giving in to immediate wishes and neglecting long-term goals.
Is system 1 bad? Are impulses really bad?
Impulses are not necessarily bad nor are reflective processes always good. Fail to distinguish between process and outcome.
A study where people got a justification to engage in bad behaviour
Which approach do the results (not) align with?
What does this show?
People on a diet were given the choice to have candy or some healthy food.
The impulse is to go for the candy, but that is not allowed when you are on a diet, that’s why the scientists gave the people a license to sin.
Justification/reason: “You just exerted more effort than average on a task.” This gave them a reason to reward themselves.
Dieters who were provided with a justification eat more ‘forbidden food’ than dieters who were not given a justification.
This is at odds with the original approach. They were given a reason, they were given a reason to reflect, but they were still impulsive. This does not rhyme with the Strack & Deutsch’s approach.
This shows that reasoning may lead to bad behaviour.
Study where impulsivity leads to good behaviour and what does this mean for the social psychologist approach?
The participants were in a state of low self-control because they had just performed a difficult task. These participants were more responsive to a social proof nudge (heuristics).
The heuristic was about a social norm that most people choose the healthy option.
Low self-control + heuristic = more healthy choices.
This shows that if you are impulsive and in a system 1 state, you are more inclined to follow heuristics. This can also have positive outcomes.
This is not in line with the social psychologist approach to system 1 and system 2.
Cognitive psychology on S1 and S2
This approach is a bit more balanced, but they still think that system 1 (intuitive judgment) reasoning is error prone.
System 2 is not designed to correct system 1.
Question: A bat and a ball cost 1.10 dollars in total. The bat costs 1 dollars more than the ball. How much does the ball cost?
And what can we deduce from this?
5 cents
50% of bright Princeton students gave the wrong answer, they said 10 cents.
System 2 is not designed to correct system 1.
The Linda problem
Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.
Which is more probable?
- Linda is a bank teller
- Linda is a bank teller and active in the feminist movement
The correct answer is 1. Linda is a bank teller. Only 20% got this right.
- Answer 2 may intuitively seem like a more representative case – social justice is more characteristic of feminists.
- The chance that Linda is a bank teller is bigger than the chance that Linda is a bank teller (one characteristic) and also active in the feminist movement (two characteristics).
There is some debate if answer 2 is really the wrong answer. From a rational view point answer 1 is correct, but people respond to the story behind it and all the characteristics that are listed are more representative to a feminist than a bank teller.
People’s intuitive answer is grounded in a useful intellectual skill: being able to determine what the speaker is attempting to convey rather than what is semantically expressed.
The intentional (S2) but uncontrollable (S1) inclination to give the ‘wrong’ response is not necessarily irrational.
