Lecture 20: Judgment and Decision Making I

Question 1

Deterministic/Deductive Reasoning

Answer 1

Start with some premise, and try to derive a conclusion that is guaranteed to be true

Question 2

Probabilistic/Inductive Reasoning

Answer 2

Tries to infer a plausible hypothesis; not guaranteed

Question 2

Normative Theories

Answer 2

How you should do it; what’s the right way to get the right answer

Question 3

Descriptive Theory

Answer 3

How people actually do it; why do they make the mistakes they made

Question 4

Mammogram Example

Answer 4

If a patients tests positive, that is evidence for breast cancer but does not necessarily mean that they have it because the base rate is low, and the doctors sometimes fail to consider that

Question 5

Descriptive Theory

Answer 5

People often don’t assign the appropriate weight to current evidence and base rate
* Not giving enough weight to the base weight

Question 6

representativeness heuristic

Answer 6

estimate of the probability of if something is a member of that category based on if something in similar to other members of that category
* This does not factor in base rate

Question 7

Birth order example. Coin flips example.

Answer 7

People assume things are more likely if they are more random, but HTHT and HHHH are both equally as likely

Question 8

Illusory correlations

Answer 8

Having lucky items

Question 8

Confirmation Bias

Answer 8

People’s tendency to try and confirm what they already believe
* Seeking out evidence confirming a hypothesis they belief

Question 9

Gambler’s Fallacy

Answer 9

The idea that after many losses one is due for a win, but probability is independent

Question 10

Anchoring-and-adjustment

Answer 10

• If I anchor a judgement, because will adjust around it
  
  • I want to sell a car for $20k
    The starting anchor has an effect on what people will counter with/adjust with