unit 11

Question 1

what is reasoning?

Answer 1

evaluation of a conclusion based solely on given information

Question 2

what is judgement?

Answer 2

using some sort of reasoning to arrive at a conclusion, an inference, an estimate, or a prediction

Question 3

what is decision making?

Answer 3

using reasoning & judgement to make a choice among several alternatives (involves some risk or uncertainty about what the best choice is)

Question 4

what is the difference between a normative approach vs. a descriptive approach?

Answer 4

normative approach: how people ought to think in a given situation to be considered “rational”
descriptive approach: how people actually do think

Question 5

humans can operate in either a heuristic mode of thought or an analytic mode of thought. explain heuristic mode.

Answer 5

heuristic mode is more automatic, you are thinking quickly without much deliberation, whilst relying on previous experiences, beliefs, or intuitions. it is efficient but imperfect. *fast, intuitive, and relies on mental shortcuts for efficiency (“gut feelings”).

Question 6

explain analytical mode.

Answer 6

analytical modes are relatively slow, deliberate, and more controlled thoughts. It is more cognitively demanding.

Question 7

what is inductive reasoning?

Answer 7

inductive reasoning: moving from specific pieces of data toward a general conclusion or rule

Question 8

what is deductive reasoning?

Answer 8

deductive reasoning: determining if a specific conclusion is valid based on the premises

Question 9

explain the difference between evaluating the validity of the argument (valid vs. invalid, which reflects reasoning) vs. the truth of the statements.

Answer 9

validity: refers to whether the arguments structure logically supports the conclusion (regardless of the truth of the premises)

invalid: refers to when the conclusion does not logically follow the premises, even if the premises is true.

example:
premises: all dogs are animals. all cats are animals.
conclusion: therefore, all dogs are cats
this argument is invalid, even if the premises are true.

truth: refers to whether the premises themselves are factually correct

Question 10

what are heuristics”? why are heuristics useful? do they sometimes have drawbacks?

Answer 10

heuristics: rules of thumb that can help guide our judgements
- often very useful, but can sometimes hinder our judgements

usefulness: they save time and cognitive effort in decision-making
drawbacks: can lead to biases or errors in judgement due to oversimplification

Question 11

what are some examples of the heuristics we use to guide our judgements?

Answer 11

1. availability heuristic
2. representativeness heuristic
3. recognition heuristic

Question 12

describe the availability heuristic.

Answer 12

basing our estimates of likelihood on the ease with which examples come to mind, based on memory.
ex: thinking plane crashes are common after seeing news coverage of one

Question 13

describe representativeness heuristic.

Answer 13

judging likelihood of group or category membership based on similarity. we assess the degree to which to object represents (is similar to) our basic idea (stereotype) of that group/category.

ex: assuming someone is a librarian because they are quiet and introverted

Question 14

describe recognition heuristic.

Answer 14

when faced with two alternatives – one that’s recognizable and one that’s not - we tend to infer that the recognizable one is bigger/greater/
ex: choosing a well-known brand over an unfamiliar one, assuming its better

Question 15

describe anchoring and adjustment heuristic.

Answer 15

making an initial estimate based on some knowledge or presented information, then making adjustments to the initial “anchor”
- the initial anchor is powerful, you might not make sufficient adjustments away from it

Question 16

what are some biases or errors that we sometimes experience when making judgements.

Answer 16

illusory correlations & hindsight bias
illusory correlations: believing two events are related when they are not
ex: it always rains when I forget my umbrella.

hindsight bias: after an event has occurred, the tendency to believe we could’ve predicted that outcome –> “I knew it all along effect”
*difficult to ignore what you now know

Question 17

expected utility theory: is it a normative approach or a descriptive approach? explain.

Answer 17

expected utility theory is a normative approach. it is decisions based on expected value (benefits and costs) of outcomes and their respective probability
ex:
flip a coin; if its heads you get $40
roll the die; if its a two or four, you get $50
which do you choose?
(people should try to maximize expected value)

Question 18

prospect theory: is it a normative approach or a descriptive approach? explain.

Answer 18

prospect theory is a descriptive approach because it explains how people actually make decisions, often deviating from rationality due to biases and emotions

Question 19

according to prospect theory, are gains and losses perceived differently? explain.

Answer 19

gains are losses are perceived differently, losses are felt more, it is called loss aversion
ex. losing $100 feels worse than the joy of gaining $100.

Question 20

prospect theory suggests that framing is important in influencing people’s choices. are people more likely to take risks in a gain frame or in a loss frame?

Answer 20

people are more likely to take risks in a loss frame because they try to avoid losses, even at the expense of greater risks.

loss frame –> risk prone (maybe we can avoid the loss)

Question 21

what is the “sunk cost effect”?

Answer 21

sunk cost effect: the tendency to continue investing in something (or continue following through with something) even in the face of loss, because of how much time, effort, or money we’ve already invested.