Task 5 Flashcards
Conjunction fallacy
The mistaken belief that the conjunction or combination of 2 events (A and B) is more likely than one event (A or B) on its own.
Affect heuristic
Using one’s emotional responses to influence rapid judgements or decisions.
Availability heuristic
The rule of thumb that the frequencies of events can be estimated accurately by the subjective ease with which they can be retrieved from long-term memory.
Anchoring-and-adjustment heuristic
Using an initial estimate (an anchor) and then adjusting it to produce a final estimate. However, the adjustment is generally insufficient.
Natural frequency hypothesis
People are better at understanding and making decisions about things when they are presented with information in a simple and natural way, like actual counts or frequencies of events happening, rather than complex fractions or percentages.
Support theory of judgment
An event appears more/less likely depending on how it’s described.
Subadditivity effect
The tendency to judge the probability of the whole set of outcomes to be less than the total probabilities of its parts (follows from the theory).
Take-the-best heuristic
When having to choose between 2 things, picking the option that has the most important or relevant information in favor of it
Recognition heuristic
A special case of the take-the-best strategy; using the knowledge that only 1 out of 2 objects is recognized as the basis for making a judgment
Kahneman’s dual-process model
Probability judgements depend on processing within 2 systems:
* System 1 - Fast, automatic, effortless, implicit and often emotionally charged, difficult to control or modify.Generates intuitive answers (e.g. based on the representativeness heuristic)
* System 2 - Slower, serial, effortful, more likely to be consciously monitored and deliberately controlled, relatively flexible and can be rule-governed
Alignment problem
Even though systems 1 and 2 are assumed to be distinct and related to attributes of consciousness, deliberation, speed etc., these attributes are much less correlated than assumed theoretically.
Good/bad fallacy
It is assumed that system 1 processing is often “bad” and error-prone whereas system 2 processing is “good” and leads to rational judgments.There is a lot of evidence that this assumption is oversimplified
De Neys’ Logical intuition model
There is rapid intuitive heuristic processing and intuitive logical processing in parallel. This initial processing is sometimes followed by deliberate system 2 processing if the 2 types of initial processing generate different responses
Von Neumann and Morgenstern’s expected utility theory
We try to maximize utility (the subjective value attached to an outcome) when we choose between several options. Utility is assessed with the formula:
Expected utility = (probability of a given outcome) x (utility of the outcome)
Prospect theory
Developed to explain the above results, based on 2 assumptions:
1. Individuals identify a reference point representing their present state.
2. Individuals are much more sensitive to potential losses than potential gains (loss aversion). They also prefer certain gains over potentially larger but less certain gains (risk aversion).
Framing effect
Decisions can be influenced by situational aspects irrelevant to optimal decision-making.
Sunk-cost effect
To persist in a course of action because of the prior investments in that option, and not because of the future consequences of pursuing that option
Impact bias
The impact of given losses or gains is greater on expected feelings than on experienced feelings (i.e. people
overestimate the intensity & duration of negative emotional reactions to losses and positive emotional reactions to gains
Omission bias
A biased preference for risking harm through inaction compared to risking harm through action.
Satisficing
Simplifying the decision-making process by using heuristics and ignoring some relevant information sources.When
making complex decisions, we cannot use the multi-attribute utility strategy, but instead engage in satisficing
Two-stage theory
Modified version of elimination-by-aspects, which has 2 stages:
* Initial stage, resembles the elimination, only options fulfilling certain criteria are retained, which reduces the number considerably.
* Second stage, involves detailed comparisons of the patterns of attributes of the retained options and is only feasible when the number of options is relatively small.
Galotti’s theory of naturalistic decision-making in unstructured environments
Involves 5 phases with flexible order
(decision-makers can return to previous phases when struggling to make a decision):
1. Setting goals.
2. Gathering information.
3. Structuring the decision (i.e. listing options + criteria for deciding among them).
4. Making a final choice.
5. Evaluating the decision
Klein’s recognition-primed decision-making model
A model of experts’ rapid decision making under pressure:
* When the situation is familiar/typical, experts match the situation to learned patterns of information stored in long-term memory using pattern recognition.
* This rapid automatic process usually leads to retrieval of a single option.
Unconscious thought theory
Conscious thinking is constrained by the limited capacity of conscious awareness, and so unconscious thinking is better than conscious thinking at integrating large amounts of information, and thus it’s more effective during complex decision-making
