PART 2 - CHAPTER 12 DEDUCTIVE REASONING AND DECISION MAKING

COG PSYCH

Anchoring and adjustment heuristic

We begin with a first approximation, then we make adjustments to that number based on additional information

Anchor

First approximation

Confidence Interval

The range within we expect a number to fall certain percentage of the time

Heuristic approach

Developed by kahneman and tversky

Heuristic approach

May underestimate people’s decision-making skills

Ecological Rationality

Describe how people create a wide variety of heuristics to help themselves make useful adaptive decisions in the real world

Default Heuristic

If there is a standard option— which happens when people do nothing— then people will choose it

Framing effect

Outcome of your decision can be influenced by two factors

(1) the background context of the choice

(2) the way in which a question is worded

Prospect theory

Refers to people’s tendencies to think that possible gains are different from possible losses

(1) when dealing with possible gains, people tend to avoid risks

(2) when dealing with possible losses, people tend to seek risks

Overconfidence

Your confidence judgments are higher than they should be based on your actual performance on the task

Planning Fallacy

People typically underestimate the amount of time or money required to complete a project; they also estimate that the task will be relatively easy to complete

Crystal-ball technique

asks decision makers to imagine that a completely accurate crystal ball has determined that their favored hypothesis is actually incorrect; the decision makers must therefore search for alternative explanations for the outcome.

My-side bias

The overconfidence that your own view is correct in a confrontational situation

Hindsight

Our judgments about events that already happened in the past

Hindsight bias

known it all along