Lecture 8 - Judgement and Decision Making (Reasoning 1) Flashcards
What are heuristics ?
Mental shortcuts to reduce processing demands on our cognitive systems
Allow for solutions to be made quickly rather than attending to all info and possibilities
What does rational cost-benefit analysis involve?
Cost-benefit analysis
Perfect decisions are impossible. Why?
Info is limited and ambiguous (imperfect information)
Time for decisions and cognitive resources are limited (limited resources)
What are errors or biases which can be caused by heuristics?
Representativeness
Availability
Adjustment and anchoring
Framing
What is availability bias?
Probabilities are assessed by the ease with which instances come to mind
Can be useful to assess the frequency of an event. More frequent events are more likely to come to mind
However, the ease of the information from memory can impact our decision making - availability bias
What is adjustment and anchoring?
Different starting points lead to different estimates which are biased toward the initial value
People will make an estimate and then adjust
Irrelevant information can bias the initial estimate
Adjustment can be insufficient leading to errors
U ANCHOR BY MAKING A DECISION THEN SAY HMM NO I WANT TO ADJUST THE DECISION AND MAKE ANOTHER ONE
What is irrelevant anchoring?
people rely too heavily on the first piece of information they receive when making a decision, even if that information is completely unrelated or irrelevant to the topic at hand, essentially using it as a reference point (“anchor”) to make their judgment, leading to biased decision-making.
What is framing?
How info is framed as a gain or a loss
a scenario is worded can influence the decision we make even tho the scenario would have the same outcome, we are influenced by the wording of the scenario and change our preference for one or the other
In gain framing - risk aversion, what was the preferred program?
72% of ps preferred program A
28% Program B
In loss framing - risk seeking, what was the preferred program?
22% preferred program C
78% program D
How can we explain Framing?
Through the Prospect Theory
What is the Prospect Theory?
- Losses are perceived as more significant= more worthy of avoiding than a gain equivalent
- A sure gain is preferred to a probable one
- A probable loss is preferred to a sure loss
- We look for options and information with certain gain bc we want to avoid sure losses
The way something is framed can influence our certainty that it will bring either gain or loss
Inconsistencies in decisions show what?
That we are using heuristics
Mental shortcuts to reduce processing demands on our cognitive systems
What are biases?
Making the wrong choice for a reason
What do visual illusions reveal?
The normal mechanisms of perception
What do heuristics errors reveal?
The normal mechanisms of reasoning
What are systematic errors (consistent/inconsistent)?
inconsistent
What makes a good heuristic?
Applicable in many circumstances
doesnt require lots of info or effort
Works = average benefits are more than costs
When SHOULD YOU USE HEURISTICS MATE?
when youre
uncertain
urgent
have limited cognitive resources
What can heuristics produce?
Biases
Systematic patterns of errors
