Week 10 - Judgement And Decision Making

Question 1

Definition of Judgement and Decision Making

Answer 1

JUDGEMENT = What is happening , evaluating , accuracy

DECISION MAKING = Choosing what action to take , deciding on a course of action , consideration of consequences

Question 2

Features of normative vs descriptive theories

Answer 2

NORMATIVE = set of rules , norms , specific correct processes / solutions

DESCRIPTIVE = how judgements and decisions are made , specific sources of solutions

Question 3

Judging Likelihood Study : (Tversky and Kageman)

Answer 3

• Ppts told taxicab involcved in hit and run
• 85% taxis green company , 15% blue
• Eyewitness identified as blue but she was only correct 80% of time
• Most common answer of ppts = 80%
  [ base rates outweigh the witness testimony]

Question 4

Formula for Bayes Theorem

Answer 4

Calculating the probability of a hypothesis given after observing some data

p(D|H) = How likely data we would be if hypothesis is TRUE
P(H)= how likely the hypothesis is regardless of data
P(D)= How likely the data are regardless of all hypothesis

P(H|D) = P(D|H)P(H)
_____________
P(D)

Question 5

Explain Neglect of Base Rates

Answer 5

[BASE RATE = RELATIVE FREQ OF AN EVENT IN A GIVEN POPULATION]

• People fail to take base rates into account when making judgements : focus on likelihood
• In medical diagnosis need to focus on rarity on disease and accuracy (more likely false pos.)

Question 6

Explain the Heuristic Approach to Judgement

Answer 6

[Strategies that ignore part of the information to make decisions more quickly than more complex methods- efficient but not guaranteed accuracy]

• Many judgement errors result from reliance on heuristics
• Example of DESCRIPTIVE theory

Question 7

Representative Heuristic

Answer 7

• Judgements of likelihood the same regardless of base rate
• Mental shortcut we use in estimating probabilities

Question 8

Availability Heuristic

Answer 8

• Estimating frequencies of events of how easy / difficult is is to retrieve relevant info from LTM
• More congnitively available info = judged more likely
• eg. Cause of death attracting most publicity (murder) are judged more likely than those who don’t even when less likely

Question 9

Strengths of Heuristic Approach

Answer 9

+ Evidence for heuristic use
+ People are prone to systematic biases

Question 10

Limitations of Heuristic approach

Answer 10

• Unclear how they reduce effort
• Errors may be made as ppts misunderstand parts of the problem

Question 11

Explaining judgement errors

Answer 11

• Distinguish between events and descriptor of events
• Event Framing [ irrelevant factors affect likelihood]
• Explicit may draw attention to less obvious

Question 12

Overview of Dual Processing Models

Answer 12

• Not all judgements are the same
• We approach judgement in 2 ways : rapidly but intuitive and slowly but selectively
• Debate if good judgements come from system 1 / 2

Question 13

4 factors decisions are made from

Answer 13

1 = Rational Reasoning
2= Heuristics-based reasoning
3= Emotions
4= Context : habits , needs , preference , time , information

We want a good outcome

Question 14

Explain Utility Theory (Decision Making)

Answer 14

• NORMATIVE theory , we maximise utility (value)
• We should use logic , probability , and stats that produce constant results

Expected utility = (probability of outcome) * (subjective value attached to that outcome)

Question 15

Explain Bounded Rationality

Answer 15

• DESCRIPTIVE theory , proposes idea of bounded rationality
• Cognitive resources , within bounds we make rational decisions, focus on explaining decisions with limited consideration
• Satisficing by choosing good enough not best

Question 16

2 stages of Prospect Theory

Answer 16

• 2 stages to make decisions :
  1= Editing (identifying options / outcomes and value / probability , outcomes framed as gains and losses)
  2= Evaluation (compute a value based on perceived outcomes and probabilities , choose one with higher probabiliy

Question 17

Overview of Prospect Theory

Answer 17

• Decisions are influenced by irrelevant aspects of the situations (framing)
• People are more sensitive to potential losses than gains : not about final outcome
• People distort high/low probabilities , rare saw as more common

Question 18

Emotional Factors contributing to decision making

Answer 18

• Hot (ventralmedia PFC) and Cool (dorsolateral PFC)
• Emotions can impair decision making
• Larger framing effects , greater loss aversion (Impact Bias)
• Emotions can improve decision making (damage to hot thinking)